Markets still searching for macro cues, but...>

FOREX: Markets still searching for macro cues, but 3+% yields helping prop up

the USD

-Another relatively directionless morning for currencies, with few macro cues to

trigger price action. Nonetheless, US 10y yields breaking above and holding 3%

overnight is helping prop up the greenback, which is second to just the NOK on

the G10 leaderboard so far as broadly higher energy prices on Middle East unrest

have lifted oil-tied FX.

-The JPY is the weakest on the day despite mixed (at best) equity markets with

the Nikkei 225 closing lower by 0.2%. A near $1bln worth of options are due to

roll-off in USD/JPY at Y110, which is helping anchor the pair ahead of the NY

crossover.

-GBP underperformed from the off and gained only minor support from a broadly

inline jobs report. While overall employment numbers rose, as did jobless claims

and the inline earnings numbers provided little insight.

-US retail sales are the highlight of the US calendar, but speeches from ECB's

Chief Econ. Praet, Bank of Canada's Schembri and Fed's Bullard are also due.