Currencies hit the reset button after some risk-off moves earlier
Asian equities are posting heavy losses on the day but it is bonds that will be the key factor driving global markets. Of note, Treasury yields are still nearly flat on the session and that is leading to some calm seen in major currencies ahead of European trading.
The yen was the early gainer but now trades near flat levels against the dollar and the rest of the major bloc. The same goes for the dollar as well with trading looking rather light to start the day, though I would argue that cautious sentiment still remains.
The pound is the laggard though as it is continuing to fall as I type this out. Cable has now slipped to a low of 1.3170 and looks to be falling further as Brexit concerns start to kick in again. It doesn't look like May's will be able to win a third meaningful vote and there's reports of a revolt in UK politics is keeping the pound on edge to start the week.
With US equity futures trading 0.6% lower, European stocks are to observe a softer open as well but let's see if bonds also adopt a more risk-off approach. If so, expect currencies to also respond in kind.
