Headlines:
- Dollar continues to hold softer so far on the day
- Beijing to shift to home quarantine model as Covid policy pivot gathers pace
- US November Challenger layoffs 76.84k vs 33.84k prior
- Eurozone November final manufacturing PMI 47.1 vs 47.3 prelim
- UK November final manufacturing PMI 46.5 vs 46.2 prelim
- Switzerland November CPI +3.0% vs +3.0% y/y expected
- Germany October retail sales -2.8% vs -0.6% m/m expected
- UK November Nationwide house prices -1.4% vs -0.3% m/m expected
- Eurozone October unemployment rate 6.5% vs 6.6% expected
Markets:
- JPY leads, CAD lags on the day
- European equities higher; S&P 500 futures up 0.1%
- US 10-year yields down 2 bps to 3.591%
- Gold up 0.9% to $1,784.33
- WTI crude up 1.4% to $81.71
- Bitcoin up 0.2% to $17,121
Markets continue to digest the post-Powell moves but overall, we are seeing the mood from yesterday carry over. European equities are higher in playing catch up to Wall Street gains overnight while bond yields are pinned lower, helping to solidify another round of selling in the dollar.
USD/JPY is the big loser, down over 1% on the day as sellers test the 136.00 level after a break below key daily support. Meanwhile, EUR/USD is holding above its 200-day moving average, briefly dropping to 1.0400 before recovering back up now to 1.0440-50.
The light bid in the dollar to start the session didn't last whatsoever, with GBP/USD being a key mover in a push from 1.2075 to 1.2200 and is just keeping under that. The pair is now looking to breach its 200-day moving average as buyers go in search of the next leg higher.
Meanwhile, AUD/USD is up 0.2% to 0.6800 and off earlier highs of 0.6839 but buyers are still looking poised after yesterday's breakout. NZD/USD is up 0.9% to 0.6350 as buyers are also seeking a break above its own 200-day moving average, seen at 0.6288.
USD/CAD is a peculiar one, with the pair holding higher today - up 0.2% to 1.3440. Perhaps there is some aggregate flows from the whole RBC-HSBC acquisition deal because otherwise, it's a tough one to explain with WTI crude up over 1% to $81.71 at the moment.
US data will now act as confirmations for the post-Powell moves before the week comes to a close and we will get PCE data later today before the non-farm payrolls report tomorrow.
