Major currencies are in a more defensive posture ahead of European trading
The yen is leading gains amid slightly weaker bond yields but also as the Chinese yuan is trading weaker after the PBOC fixed the currency weaker again today. The offshore yuan is trading at 7.17 per dollar currently:
As such, the aussie and kiwi are also holding weaker today as major currencies are retracing their overnight moves somewhat. Meanwhile, the dollar is holding more steady against the likes of the euro and pound, with EUR/USD sitting in just a 9 pips (!) range.
Equities sentiment remains more modest with US futures sitting near flat levels and Asian equities are faring slightly better. Treasury yields are a little weaker but nothing too overwhelming to suggest major risk-off sentiment.
Looking ahead, the risk mood will be a key factor affecting market sentiment amid the ebb and flow of month-end trading as well.
As mentioned yesterday, I still feel markets were too optimistic on Trump's remarks on trade so perhaps we're seeing currencies retrace some of that today.
