The rates market continues to challenge the Fed to cut further
Equities are sitting higher on the day with US futures keeping gains of well over 1% while European equities are also picking up steam now with Germany DAX up by 0.5% from flat levels to open the session.
However, Treasury yields continue to sit at the lows for the day and is basically challenging the Fed to keep up with more rate cuts after the 50 bps move yesterday.
The currencies space is looking rather torn, with dollar weakness starting to creep back in.
USD/JPY has pulled back from 107.60 to 107.40 and EUR/USD paring earlier losses to climb back towards 1.1180 now. Meanwhile, commodity currencies are still staying bid as well.
There is still a lot of push and pull in the market but I reckon a major focus remains the yields erosion in Treasuries and that continues to keep the dollar pressured as we navigate through the trading week after the events yesterday.
