Headlines:
- 10-year Treasury yields fall back towards 4% on the day
- ECB's Muller: March rate hike most likely not the last
- ECB's Vasle says expects additional rate hikes after the one in March
- ECB's de Guindos: Interest rate path after March will be data-dependent
- Eurozone January PPI -2.8% vs -0.3% m/m expected
- Eurozone February final services PMI 52.7 vs 53.0 prelim
- Germany January trade balance €16.7 billion vs €11.0 billion expected
- Italy Q4 final GDP -0.1% vs -0.1% q/q prelim
- UK February final services PMI 53.5 vs 53.3 prelim
Markets:
- GBP and JPY lead, USD lags on the day
- European equities higher; S&P 500 futures up 0.4%
- US 10-year yields down 5.5 bps to 4.008%
- Gold up 0.6% to $1,847.33
- WTI crude down 0.5% to $77.75
- Bitcoin down 4.5% to $22,353
It was a session where the headlines didn't matter too much, well not that there were any major ones in Europe anyway. ECB policymakers continue to play it coy with what comes after March while economic data in the region failed to offer much of anything new.
Instead, it was the retreat and pull back in the bond market that is reverberating today. 10-year Treasury yields have fallen back towards 4% and that is seeing the dollar offered across the board, with USD/JPY notably falling from 136.65 to 136.00 during the session.
In turn, equities were slightly underpinned with US futures gradually moving higher and European stocks are just continuing to vibe in their own world so far this year. To put things into context, the CAC 40 index is just 0.6% shy of a new all-time high.
Going back to FX, EUR/USD wasn't a main mover as the pair stuck around 1.0610-20 for the most part. There are large expiries near the figure level that could be acting as a bit of a pull but I would argue that at this current point in time, the euro has more similarities to the dollar than other major currencies.
Elsewhere, GBP/USD is up 0.4% to near 1.2000 while AUD/USD is up 0.3% to 0.6750. It isn't so much an equal move among the antipodeans as NZD/USD is seen flat at 0.6220 now after having traded to around 0.6240 earlier in the day. For me, that's just the flows talking so I wouldn't look much into it.
All eyes now are on the US ISM services index coming up later. We'll have to see if that will provide another set of triggers for market players to work with before the weekend.
