European open: Macro vacuum
|Investors are trying to drum up the muster to get back into the soft landing trade, which means rates are still high, but rate volatility dies. Still in the back of their mind is that scorcher of an NFP suggesting there remains a risk of inflation coming back.
For the next little while, the central banks aren't as important as the economic data will be. With markets operating in a macro vacuum today, investors aren't exactly scrambling to put on risk.
Forex is quite dull with EURUSD trading choice most of the morning but failing to get a rise out of slightly better risk sentiment; however, with China reopening faltering on the back of an uptick in US-China frictions, seemingly taking the wind out of the FX market sails, action has been tepid.
Given the lack of carry factor, getting back in the saddle is challenging in Asia FX, even for currencies with strong export or tourism linkages to China. After all, you get paid well to hold dollars in the bank, so investors might wait for the Yuan to recover some of its mojos on growth catalysts before re-engaging.
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