The risk rotation continues to play out and that is one of the major themes in markets this week. I'm still trying to find a balance in viewing whether this is just jitters about inflation, high rates, and softer global growth, or perhaps a building up of quarter-end flows from stocks to bonds. Or maybe it is a bit of both?
China's efforts have certainly been greeted with disappointment, so there's that to factor in as well but the dollar itself hasn't been running rampant despite the market moves this week. Hmm.
In any case, the charts will continue to be the best tool you can lean on in cases like this. And yen pairs and gold are two key ones to keep an eye out for I would say, at least for now.
For today, it's a toss up for the BOE to hike between 25 bps and 50 bps but I'm favouring the former despite the hot UK inflation data this week.
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