• AUD leads, CHF lags on the day
  • European equities higher; S&P 500 futures up 0.2%
  • US 10-year yields up 4.6 bps to 1.388%
  • Gold down 0.3% to $1,778
  • WTI up 3.3% to $68.40

Risk trades are breathing a little easier to start the week so far, as the market continues to reserve judgment on the omicron variant for the time being. The science and data continue to suggest that while highly transmissive, the virus strain may be less severe than feared.

But again, the information available is rather scant so it is tough to draw any firm conclusions for now.

However, after the battering last week, equities are inching slightly higher with European indices seen up 0.5% to 0.9%. Meanwhile, S&P 500 futures are holding light gains of around 0.2% at the moment.

While optimistic, there is certainly room for caution as stocks are sandwiched between virus fears and concerns about a quicker pace of tightening by the Fed.

Elsewhere, 10-year Treasury yields are pulling higher and up nearly 5 bps to 1.39% so that is at least helping with the risk mood.

In turn, the dollar is trading mixed as such with gains seen against the euro and yen but trailing against the commodity currencies bloc mostly.

EUR/USD is lingering around 1.1280-00 for the most part while USD/JPY is keeping a light advance around 113.10-20 on the session.

The pound is an admirable performer with cable seen up 0.3% from 1.3240 to 1.3270-80. But commodity currencies are the lead performers with the aussie and loonie in particular doing well.

AUD/USD is bouncing off support around 0.7000 to 0.7040 while USD/CAD is benefiting from higher oil prices, keeping just below 1.2800 for most of European morning trade.

While the market is taking a slight breather, best be reminded that virus fears are still in the picture and sentiment is rather fragile for the most part after last week's shakiness.