The Australian dollar is the leader today while the yen is lagging in a sign that the risk trade continues to claw back omicron losses. It will be a long battle to recoup all the declines but the tone has been good so far this week.
Today, AUD/JPY is up 38 pips to 80.36. That erases Friday's decline and underscores support at 78.80.
The RBA provided some of the extra lift for the Australian dollar with an upbeat statement but CAD and GBP are close behind in a sign that it's mostly the risk trade at work.
Elsewhere, US 10-year yields are up 1.5 bps to build on the 10 bps gain Monday. Oil is up another 1% and stocks in Asia are higher with the Nikkei up 2% (though the Shanghai Composite is giving back some gains).
It's all about omicron as optimism builds that this wave will be less-severe even if it's more contagious. We will be watching the data and commentary very carefully but the market is showing some better signs. Let's hope it's not misplaced.
One emerging spot to watch is China where reports say Evergrande creditors didn't receive coupon payments due yesterday.
