The equities rebound from Monday carried through to yesterday and risk trades soared as a result. The S&P 500 climbed back above 4,700 and we also saw oil prices power through $80 in a notable break higher.
In FX, the dollar and yen were the laggards though things are keeping steadier to start the new day so far. Changes are light with US futures just mildly higher. Elsewhere, risk trades can take in comfort that we're also seeing a retreat in Treasury yields with 10-year yields backing further away from 1.80% to 1.73%.
It's all about the risk mood once again in the day ahead and the US CPI report later will set the tone for how we will proceed. As such, sentiment may stay cautiously optimistic until then.
That said, be wary of the elephant in the room though. I continue to hold the view that broader markets are underestimating the potential risks from China, but I guess we'll get there when we get there.
0700 GMT - Germany December wholesale price index
1000 GMT - Eurozone November industrial production
1200 GMT - US MBA mortgage applications w.e. 7 January
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.
