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Global Risk Recovering; Brent Prints Below 75$/bbl

CROSS ASSET
  • Global risk is recovering, with US and European equity futures seen higher, although the pullback in the US 10y yield persists: 10y at 3.40% and lowest level since Apr 26.
  • Crude resumes the decline from yesterday to take Brent back below 75$/bbl, driven by recessionary fears and concern for future oil demand growth. Next technical support for Brent is at 74.06$/bbl.
  • Pressure on the greenback extended through Asian hours session and into the European open. The JPY is the day’s strongest G10 currency, closely followed by GBP. EUR is also trading firmer, with EUR/USD eyeing resistance at 1.1095 – the April 26 high.
  • Across EM, the MYR outperforms following the unexpected 25bps hike from the BNM. HUF is outperforming in CEE as optimism builds that legislative changes will unlock access to EU cohesion funds. Nevertheless, the CZK trades firmer ahead of the CNB policy meeting – where rates are widely expected to be held.

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