Broader market sentiment is looking more positive again as the UK political drama and gilts crisis start to die down. The optimism is also helped further by a report that the BOE looks set to delay QT (again) and after the whole fiasco involving liquidity in the gilts market, you wonder if they can ever even get to the point to get that process going.
The dollar is weaker across the board but this isn't the first time we're seeing markets try to catch some relief on consecutive days, yet the greenback is still in a dominant position all things considered.
EUR/USD is up 0.2% to 0.9850-60 but parity is keeping a firm lid on any bullish price action in the pair. Meanwhile, the pound is seeing a decent bounce after the UK fiscal U-turn and is up to near 1.1400 but I would like to see a push above 1.1500 to really justify a further squeeze higher in cable.
USD/JPY remains perky just below 149.00 with Japanese authorities continuing to step in with verbal intervention for now. The 150.00 mark remains the critical point to watch for the pair ahead of the central bank bonanza in the coming two weeks.
As for commodity currencies, they are finding some decent relief in the past few sessions but that comes after a continued rout amid the selling in equities. Much like the relief rally so far to start the week, things may look good now but don't be surprised if sentiment quickly turns on its head in the days or week to come.
Looking ahead today, there's not much in terms of data to really shake things up so risk sentiment will continue to be a key driver. We will also hear from the EU on their latest proposal for a price cap on natural gas, so keep an eye out for that.
0900 GMT - Germany October ZEW economic sentiment
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
