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For the time being, the dollar is a little weaker as we look ahead to the session. EUR/USD would be a decent barometer of general dollar sentiment, and any advance towards 1.1400 would be an important milestone to watch. The swing area highs of 1.1383-86 will be a big test for buyers looking to break out of the range that has been in place since mid-November of last year. 

Meanwhile, the SNB looks to be doing its job, as the EUR/CHF crosses back over 1.0500. It’s early in the year, but they’re making their presence known, which serves as a reminder to market participants that they’re still present. 

In other news, gold is regaining ground over $1,800 in the hopes of resuming its upward trend.

The bond market continues to be a crucial generator of mood, so we’ll see how things play out. Treasury rates are not finding new legs for the time being, with 10-year yields falling 1.8 basis points to 1.76 percent on the day. In the meanwhile, gold may take solace.

European equities

Eurostoxx +0.8 percent, Germany DAX +1.0 percent, France CAC 40 +1.0 percent, United Kingdom FTSE +0.5 percent and Spain IBEX +0.2 percent. 

This is due to some catch-up from yesterday when European indexes closed in the red and we missed out on all the dip-buying action late in US trade. Today’s calmer market atmosphere is also beneficial. As we begin, the S&P 500 futures are up 0.1 percent, the Nasdaq futures are up 0.2 percent, and the Dow futures are flat. 

The increase at the open today cancels out the decline from yesterday for most regional indexes.

GBP/USD

• GBP/USD rises to its highest level in more than two months as buyers extend their legs. 
• Cable is trading over 1.3600, its best level since November 4th. 
• The pair is up 0.3 percent as the pound is one of the day’s better performers. The move higher is also due to some dollar sluggishness overall, since risk trades are performing better in general. The rebound in stocks yesterday has kept the general atmosphere upbeat, and this is spreading across broader markets. 
• Notably, cable buyers are able to defend last week’s surge over the 100-day moving average (red line). This is a positive technical aspect that adds to the buyer’s tailwind.
• With a break over 1.3600, the next significant resistance level is closer to the 200-day moving average (blue line), which is now at 1.3733. In the interim, this allows purchasers some leeway. 
• In terms of the fundamental outlook, both the Fed and the BOE are expected to raise interest rates in the next months, and it will come down to whether central bank blinks first to detect any meaningful shift in outlook divergence. That is especially true given that the market has already priced in and anticipates rate rises.