• JPY leads, AUD lags on the day
  • European equities mildly lower; S&P 500 futures down 0.3%
  • US 10-year yields down 1.2 bps to 1.497%
  • Gold down 0.3% to $1,776.80
  • WTI down 0.8% to $71.77
  • Bitcoin down 2.8% to $49,232

The optimistic shine from yesterday is turning rather dull so far today. The market mood is rather tentative as traders and investors start to turn the page to key central bank meetings next week.

Evergrande officially defaulting on its offshore bond payment didn't help in terms of headline risks. However, even with Fitch downgrading both the firm and Kaisa, it didn't really upset domestic markets. As such, any spillover impact to broader markets is rather contained.

But we are seeing a pause to the recent optimism this week for the time being. There is plenty to consider in the week ahead, with key central bank meetings adding to the wait on more news on the omicron front.

US futures are pointing to slight losses while European indices have put in a sluggish shift so far. Even the mood in bonds is lacking any enthusiasm with 10-year Treasury yields down back below 1.50%.

In FX, that is helping the yen inch ahead with USD/JPY slipping from 113.60 to 113.36. The pair is finding some support from key near-term levels around 113.34-43 so that is holding for now.

Meanwhile, EUR/USD is down slightly from 1.1340 to 1.1310 as the dollar is keeping slight firmer across the board.

Commodity currencies are seeing gains pull back on the week with AUD/USD down 0.4% to 0.7140 from around 0.7170 earlier.

In other news, the PBOC also moved to curb strength in the yuan by hiking the foreign exchange RRR. That saw the yuan fall back to 6.36 after having advanced past 6.35 against the dollar.

It's looking more like a pullback to the risk optimism in recent days more than anything else. Oil is also down 0.8% to $71.77 but that is just chipping away at the gains from the start of the week.

As the market focus slowly switches to key central bank meetings next week, we may be in store for some added pushing and pulling before the weekend comes along.