With the US jobs report in focus, that should make for a quieter session in European morning trade today. The bond market is the key driver of broader sentiment right now but I reckon traders would rather wait on the main event than to keep running with the moves in the past two days - at least for now.
In my view, the balance of risks seem rather skewed at the moment. A softer set of readings from the non-farm payrolls later is likely to invite a bigger reaction, pouring fuel to the fire in the rally in bonds this week. That will in turn weigh further on the dollar and drive equities higher.
As for a stronger set of employment numbers later, I doubt that it will lead to a turnaround in bonds this week. At most, it will allow the dollar to catch a break heading into the weekend. At worst? Traders might just end up shrugging the numbers and keep the bond market rally going this week. And I wouldn't surprised whatsoever if we got to that.
For European trading today, it will most likely be a placeholder session. There isn't any significant data releases and so, markets will stay honed in on the US job report later in the day.
0700 GMT - Germany September trade balance data
0930 GMT - UK October final services, composite PMI
1000 GMT - Eurozone September unemployment rate
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
