Greenback Edges Higher In Sync With U.S. Tsy Yields

Worrying COVID-19 trends in Shanghai & Macau have lent some support to safe haven currencies at the start to the week, although e-mini futures are already back in the green. The region is also catching up with expectation-beating U.S. NFP report released after hours on Friday.

• Shanghai's cluster of cases kept growing over the weekend, as the city added most cases since late May after detecting a new, more contagious sub-strain of Omicron last Friday. Meanwhile, Macau shuttered almost all of businesses for a week to contain its worst outbreak of the virus.
• The greenback outperforms at the margin, as better than expected labour market data fanned expectations of adamant hawkish steps from the Fed. Cash Tsy yields sit higher across the curve.
• Other traditional safe havens (JPY, CHF) have also strengthened a tad, presumably in response to the news from China. It seems that Japanese election results have had little impact on the yen.
• The loonie holds firm as WTI has clawed back initial losses, but its commodity-tied peers (NOK, AUD, NZD) remain among the worst G10 performers at typing.
• After the data-light Asia-Pac session (Singapore is off for a public holiday), focus will turn to Norwegian CPI and some second-tier releases from across the Eurozone.
• Comments are due from BoJ Gov Kuroda, who will speak at the regular branch managers' meeting, as well as from ECB's Nagel.