Risk on is on
All the chips are being pushed in as the world economy reopens and that has the “risk on” flows in full force. The NZD and AUD are leading the way to the upside. The USD and JPY safe haven flow have been shut off and they the weakest. Stocks are higher. Yields are higher.
The ranges and changes show the USD is trading at session extremes as North American traders enter for the day. Ranges are strong with perhaps the exception of the USDJPY and USDCHF (at 42 and 56 pips respectively. The JPY crosses are near highs as well with perhaps the exception of the EURJPY (up 57 pips vs a high at 85 pips.
In other markets:
- investors are selling gold. The precious metal is down $ 5.29 or -0.30% at $ 1726.60
- WTI crude oil futures are trading higher by $ 0.88 or 2.65% at $ 34.13 on hopes of increased global growth
in the premarket for US stocks, the futures are implying a strong opening for the major indices:
- Dow, +511 points
- S&P index +54 points
- NASDAQ index +142 points
in the European equity markets they to are marching higher:
- German DAX, +0.4%
- France’s CAC, +1%
- UK’s FTSE 100, +1%
- Spain’s Ibex, +1.1%
- Italy’s FTSE MIB, +0.8%
In the US debt market, yields are higher but still somewhat contained. The yield curve is also steeper with the 2 – 10 year spread up to 50.52 basis points from 49.15 basis points on Friday’s close.
In the European debt market, German and French yields are rising by the most with the German yield up 5.3 basis points and France’s 10 year benchmark yields up 4.5 basis points (and also back above 0.0%).