The AUD is the strongest and the JPY is the weakest as the North American session begins. The USD is mixed to lower to start the new trading week with declines mainly vs. the commodity currencies.

The strongest to weakest of the major currency pairs

China eased bank reserve requirements as financial institutions brace for Evergrande. The impact frees up liquidity in the banks which should ease the blow to the system at least. Evergrande warned on Friday that it would likely not be able to meet interest payments.

Omicron reports over the weekend indicated that the variant is likely less dangerous than previously thought. Dr. Fauci said that the variant reports were encouraging as there didn't seem to be a great to degree of severity.

   Bitcoin  and other digital currencies i.e., Ethereum, Solana, etc., have recovered some of the weekend declines which saw the digital currency fall to around $42000 at the low (down around 39% from the high in November to the low on Saturday).

US stocks are mixed with the Nasdag falling again, while the Dow and S&P are higher. On Friday, the Nasdaq tumbled -295.85 points or -1.92%. The S&P fell -0.84% and the Dow -0.17%.

US yields are higher (4-6 basis points) with the 2-10 year spread steady at around 76 basis points. The Fed shifted focus onto stopping inflation last week. As such, traders are now expecting the Fed to increase the taper trajectory to $30B per month from $15B starting at the December meeting. The market now puts a June tightening up to 70%.

Crude oil prices are higher to around $68.40 after dipping to the $62 handle last week.

In other markets:

  • Spot gold is trading down $-3.55 or -0.20% at $1779.48
  • Spot silver is down $0.15 in -0.67% $22.35
  • WTI crude oil is trading up at $68.33
  • Bitcoin is trading at $48,660

The futures in the US are implying a mixed opening with the Dow and S&P higher while the NASDAQ is lower:

  • Dow industrial average up 209 points after Friday's -59.71 point decline
  • S&P index +9 points after Friday's -38.65 point decline
  • NASDAQ index -60 points after Friday's -295.85 point decline

In the European equity market, the major indices are higher:

  • German DAX +0.45%
  • France's CAC +0.8%
  • UK's FTSE 100 +0.9%
  • Spain's Ibex +1.1%
  • Italy's FTSE MIB +0.5%

In the US debt market, yields are higher with the five year trading up five basis points. The two year is up 3.4 basis points.

The two year yield
The change in the US yields

In the European debt market, the yields are mostly lower but only modestly.

European yields are mostly lower
The benchmark 10 year yields in Europe