Among the major central banks last week, we had the Fed hiking by 75 bps, the SNB pulling off a surprise policy pivot, the BOE keeping with its gradual tightening schedule, and the BOJ not making any changes to easy policy just yet. It was far from straightforward though with plenty of little subtleties during the week.
On Friday, the market managed to find some calm and that is carrying over a little to today. It is a US holiday so the long weekend could see little change in the overall market narrative for the time being.
There's still plenty to digest in terms of central bank outlook but we'll slowly grow into that in the weeks ahead and as more economic data comes along to help shape things up.
For now, the dollar is lightly softer amid a bit of a push and pull start to the day as US futures nudge a little higher. European futures are more tepid though, so that is offering some balance to overall sentiment. EUR/USD opened earlier with a gap lower around 1.0472 but has now recovered to 1.0525, though the 200-hour moving average is capping the upside for now at 1.0534.
Elsewhere, the franc continues to keep firmer as USD/CHF is down 0.4% to 0.9660. The lows last week around 0.9620-29 will come into play first before getting to the late May to early June lows around 0.9545-56.
Looking ahead to Europe, regional bonds will continue to be a focus as traders continue to await more details on the ECB's plan to deal with fragmentation. The good news at least is that there are calmer tones prevailing in that space as well with the 10-year Italian and German bond yield spread tightening back to below 200 bps:
