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- So far in European morning trade, market tones are mixed: bond yields are rising, the dollar is falling, and stocks are holding steady.
- There are some mixed undertones playing out in European morning trade so far, as markets are likely settling in after the Easter holiday. • The dollar is trading slightly lower (except against the yen and franc), even as bond yields rise.
- EUR/USD is up 0.2 percent to trade back above 1.0800, but it still faces near-term resistance from its 100-hour moving average at 1.0823. GBP/USD is also still flirting with daily support at 1.3000, having recently traded up to 1.3030 from a low of 1.2990.
- The USD/JPY remains a notable exception, with the yen falling like a fly across the board.
- The pair is currently trading at 128.30, up 1.1 percent. In other news, European stocks are still being pushed lower by nearly 1% across the board. Furthermore, US futures have erased earlier gains, with the S&P 500 futures currently trading down 0.1 percent.
- Bond sales have resumed, with 10-year Treasury yields hovering around 2.90 percent.
- This is the highest level since December 2018.
- Here are the current Treasury yields:
- 2-year yields are up 1.7 basis points to 2.477 percent.
- 5-year yields increased by 2.7 basis points to 2.823 percent.
- 10-year yields are up 3.5 basis points to 2.897 percent.
- 30-year yields increased by 3.5 basis points to 2.987 percent.
- The levels are the day’s highs as bond selling appears to be resuming. As a result, the USD/JPY is rising, with the pair now up 145 pips to 128.42. The yen is being dragged down across the board, with the AUD/JPY trading at its highest since July 2015, closing in on the 95.00 level.
- Ten-year Treasury yields are attempting to break through key resistance in the form of the 200-month moving average (blue line) as well as the channel range that has been in place for more than two decades.
- OPEC+ compliance rises to 157 percent in March, up from 132 percent in February, as Russian output is hit by sanctions.
- This is to be expected given the situation with Russia, which underproduces by 313k bpd in March due to ongoing sanctions.
- The widening supply gap will be something to watch, as it will offset slowing demand, given that the global economy is expected to slow as inflation takes hold.
- European equities open lower. Sluggish tones to begin the day
- Stoxx 600 -0.8 percent, Germany DAX -0.7 percent, France, CAC 40 -0.9%, FTSE 100 -0.2% & IBEX 40 -0.5%.
- The prospect of higher inflation continues to weigh heavily on sentiment in Europe, leading to the expectation that the region will experience a significant economic slowdown in the coming months.
- The failure to resolve the Russia-Ukraine conflict also does not help in this regard.
- However, keep in mind that overall risk sentiment is mixed on the day, with US futures holding slightly higher.
- S&P 500 futures are currently up 0.3 percent, Nasdaq futures are up 0.5 percent, and Dow futures are up 0.3 percent.