Limited Core FI Trade Owing To Holidays & Impending Event Risk

There isn’t much in the way of meaningful commentary to add to our earlier colour re: core FI markets. The impact of the closure of cash Tsys until London hours owing to the observance of a Japanese holiday is being compounded by holidays in Singapore & China, with the subsequent withdrawal of regional liquidity and lack of major news flow resulting in muted market moves thus far. The proximity to today’s RBA decision and Wednesday’s FOMC decision adds impending event risk into the mix when it comes to participants remaining sidelined. More widely, the slight downtick in the DXY has provided the major area of market focus thus far, although the index remains close to the cycle highs that were registered last week. There has been a lack of fundamental catalysts apparent when it comes to explaining the downtick in the greenback, resulting in the usual book squaring speculation.