EUR Recoups Most Early Losses, Broader USD Indices Close To Unchanged

Broader USD indices sit little changed in the first part of Monday dealings. The BBDXY last around 1260.2.

• Early focus was on EUR/USD weakness, following the surprise French legislative election results, with the left New Popular Front (NFP) unexpectedly winning the most seats but not enough to have a majority. A hung parliament is now likely. The pair fell close to 1.0800, but has largely unwound these losses, last near 1.0830, which is close to end Friday levels of 1.0840.
• USD sentiment has been softer during parts of today, but there has been no follow through. USD/JPY got to lows of 160.26, but sits back at 160.55/60 in latest dealings, only down marginally for the session.
• Earlier data showed weaker than expected headline labour earnings data in Japan, with real earnings remaining comfortably negative. Still, the detail, and same sample based data pointed to more positive trends (see this link).
• US yields are higher but away from best levels, last a little up over 1bps for the Tsy benchmarks. This leaves the bulk of Friday's yield losses intact. US-JP yield differentials continue to track lower.
• In the equity space, most regional markets are lower, while US futures are a little over 0.10% off at this stage.
• AUD/USD and NZD/USD both sit a tough higher, with both pairs supported on dips. AUD/USD last near 0.6750/55, NZD near 0.6150.
• Looking ahead, US May consumer credit and June NY Fed inflation expectations and German May trade data are due. Also BoE’s Haskel speaks.