Headlines:

Markets:

  • NZD leads, JPY lags on the day
  • European equities slightly higher; S&P 500 futures up 0.1%
  • US 10-year yields up 4 bps to 3.433%
  • Gold down 0.2% to $1,927.98
  • WTI crude up 0.2% to $80.49
  • Bitcoin up 0.3% to $21,014

It was a relatively quiet session with the dollar sitting more mixed across the board while the post-BOJ volatility in the yen continues to play out. The overall risk mood is seen holding up but early gains in equities have been pared and there is a sense of cautious optimism now, as market players are surely fearing more selling after the drop in the past two days.

In the bond market, yields continue to push higher in Europe and 10-year Treasury yields are also seen up 4 bps on the day to 3.433% currently. That is helping to pin down the yen as well, which was not helped by BOJ governor Kuroda's remarks in Davos - hinting that there will not be any other policy tweaks before his term ends in April.

USD/JPY moved up from 128.80 to hold just above 130.00 currently as buyers start to show some poise again.

Meanwhile, EUR/USD was also higher earlier in a push to 1.0860 before retreating to flattish levels now at 1.0820 as the dollar is keeping steadier.

The pound is down 0.3% to 1.2340 levels against the dollar, after having seen yet another disappointing UK retail sales data. The report pretty much reaffirms a collapse in consumer spending, as the cost-of-living crisis worsens in the UK.

Elsewhere, as the risk mood is steadier today, the aussie and kiwi are also slightly higher but have seen early gains pulled back. AUD/USD is up 0.1% to 0.6920 but off earlier highs of 0.6947 upon a rejection of its 200-hour moving average as well.

If anything else, watch for how equities will perform later when Wall Street steps in as that will likely act as the key driver, alongside the bond market, of trading sentiment before the weekend.