The dollar is keeping steadier as we get things underway in June trading, regaining some light ground after losses in the past two weeks.
Markets are still sorting out their feet in the new week and while Treasury yields have recently declined as bonds sought a breather, they are on the rise again this week as inflation focus returns. The catalyst has been the surging numbers in Europe, seeing regional bond yields also jump higher in the past two days.
For some context, 10-year German bund yields are up 16 bps from Friday to 1.12%. Meanwhile, 10-year Italian bond yields are up 23 bps to 3.12%. That has helped to see 10-year Treasury yields return from the long weekend with a push higher by 11 bps to 2.85% yesterday.
Elsewhere, US stocks managed to snap a run of losses last week but there are still questions surrounding the general risk appetite. Is this makings of a "bear market bounce"? As inflation continues to surge, how is the economic outlook going to hold up in the weeks/months ahead?
Equity futures are pointing to slight gains to start the day but there are some nervous undertones still present. There is an argument for a continued bounce in sentiment but there is still seemingly a lack of bullishness in the bigger picture surrounding equities for now.
Looking ahead, there will be quite a number of releases in Europe to chew on but nothing that should really impact markets too much.
0600 GMT - UK May Nationwide house prices
0600 GMT - Germany April retail sales
0715 GMT - Spain May manufacturing PMI
0730 GMT - Switzerland May manufacturing PMI
0745 GMT - Italy May manufacturing PMI
0750 GMT - France May final manufacturing PMI
0755 GMT - Germany May final manufacturing PMI
0800 GMT - Eurozone May final manufacturing PMI
0830 GMT - UK May final manufacturing PMI
0900 GMT - Eurozone April unemployment rate
1100 GMT - US MBA mortgage applications w.e. 27 May
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.
