The week started on a calm note, with small gains in European indices and US futures.
The selloff in cryptocurrencies slowed, crude oil consolidated above the $110 per barrel and gold remained offered as the improved risk appetite, and the prospects of higher US yields weighed on appetite.
The currency markets were calm as well, with the US dollar giving back some field against most majors. The EURUSD consolidated above the 1.05 level. The spread between the Italian and German 10-year yields narrowed since the ECB announced that they will invent another financial instrument to deal with the diverging pace of rising yields between the core and the periphery.
Elsewhere, Cable was bid above 1.22 as Brits are holding their breath before tomorrow’s inflation data, and the Aussie-dollar approached the 70 cents mark post-RBA minutes.
We have certainly a couple of more hours of calm in the markets. But the things will start getting serious with Jerome Powell’s semi-annual testimony due Wednesday and Thursday, where he will reiterate how strong the Fed is committed to fighting the soaring inflation in the US.
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