Headlines:

Markets:

  • EUR leads, JPY lags on the day
  • European equities higher; S&P 500 futures up 1.5%
  • US 10-year yields up 5.3 bps to 3.292%
  • Gold down 0.3% to $1,832.63
  • WTI crude up 1.5% to $111.20
  • Bitcoin up 2.5% to $20,922

It was a quiet session in terms of headlines as markets await the return of US traders from the long weekend.

Apart from central bank remarks, we saw the euro area current account deficit widen to €5.8 billion, the most in more than a decade, as surging oil and gas prices from the Russia-Ukraine conflict create a massive drag on trade.

Risk tones were calmer for the most part as equities are still seeing a bit of a breather after last week's heavy selloff. Treasury yields are also a little higher while European bond yields were steady even as ECB policymakers push a more hawkish agenda.

In FX, the dollar was initially weaker amid the softer risk appetite but is now trading more mixed as a jump higher in USD/JPY sparked some inflow back into the greenback. The pair ran up from 135.10 to 136.30, its highest since 1998, as buyers look to establish the next leg higher after having seen the BOJ kept policy unchanged at the end of last week.

EUR/USD remains more bid, holding around 1.0550 - up 0.4% on the day - after a run higher to 1.0580 earlier in the session.

Meanwhile, GBP/USD moved up to hit 1.2300 before coming back down to remain little changed around 1.2260-70 levels amid the dollar push and pull. AUD/USD also switched from gains to being more or less unchanged now after a drop from 0.6980 to 0.6950 while NZD/USD fell from 0.6355 to 0.6320 as the dollar bids came back in.

The franc remains a decent performer following the SNB pivot last week, with CHF/JPY also a notable breakout on the day as it rushes above 140.00 to 140.80 at the moment - its highest since 1980.