Headlines:
- Euro extends fall to fresh five-year low against the dollar
- Bulgaria energy minister confirms that Gazprom has halted physical gas flows to Bulgaria
- Russia's Gazprom: Gas supplies to Poland, Bulgaria halted until payment in rubles is made
- A RBA rate move for next week is all but priced in now
- ANZ sees RBA hiking cash rate next week to 0.25%
- Germany May GfK consumer sentiment -26.5 vs -16.0 expected
- US MBA mortgage applications w.e. 22 April -8.3% vs -5.0% prior
- UK April CBI retailing reported sales -35 vs -3 expected
Markets:
- AUD leads, JPY lags on the day
- European equities higher; S&P 500 futures up 0.3%
- US 10-year yields down 1.7 bps to 2.755%
- Gold down 0.3% to $1,900.73
- WTI up 0.4% to $100.80
- Bitcoin up 2.4% to $39,020
The main talk in Europe is on Russia cutting off gas supplies to Poland and Bulgaria but new developments showed that there are some players in the region which are already caving to Russian demands to continue supply with payments in ruble - technically.
Still, the Russian threat adds to further woes for the economic outlook and is weighing further on the euro. The single currency slumped to its weakest in five years against the dollar, falling below 1.0600.
The yen was also a notable loser, with USD/JPY pushing back up to 128.00 as dip buyers stepped in ahead of the BOJ policy decision tomorrow.
Meanwhile, the pound continues to meander with GBP/USD still setting its sights on the 1.2500 level. AUD/USD was slightly more buoyed but has seen early gains erased, easing from 0.7170 to 0.7130. The early rise came after a hot Australia Q1 CPI report and analysts are now calling for the RBA to hike rates as soon as next week.
Elsewhere, equities are seeing a light reprieve after yesterday's meltdown while the bond selloff continues to take a bit of a breather heading into the month-end.
