Mr. Powell, I'm not feeling too good...
After the selloff yesterday, the market is keeping that up as we look towards European trading today. Virus fears continue to be the hot topic with cases picking up across Europe and in the US, emanating fears of a deeper economic fallout globally.
The yen is staying underpinned as such, with US futures sitting 1.4% lower and Treasury yields continuing to sink lower and lower during the course of the week:
The kiwi is a surprise gainer so far today but I wouldn't look much into that for now as it is likely related to some short covering rather than a building rally.
The dollar remains a bit mixed to start the day with small changes across the board, though USD/JPY is looking to keep a break under 106.00 and towards the 105.00 level.
Looking ahead today, US non-farm payrolls will matter little in the grand scheme of things but it does present a bit of an asymmetric risk for the dollar in trading today.
A solid report will do little to shift the focus away from virus fears but a poor report will compound worries for the dollar amid the yields erosion seen in the past week.
Then, there is also the OPEC+ meeting conclusion to look forward to but given the risk and virus situation, an agreement to cut oil output by 1.5 mil bpd may not do much to lift market sentiment in the bigger picture.
