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Yen Underperforms Amid Risk Rebound, Equities/US Yields Higher

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The BBDXY sits around 0.10% lower in the first part of Monday trade, the index back near 1263. This keeps us within recent ranges for the index. Better risk appetite has weighed on USD sentiment today, as sentiment stabilizes/improves post Friday's dip.

  • Lack of fresh military action re Israel/Iran has aided sentiment, while the US house passing a weekend aid bill for Ukraine, Israel and Taiwan, has also been in focus.
  • US equity futures opened higher and have stayed in the green. We were away from highs in recent dealings, Eminis last around +0.30%, while Nasdaq futures were +0.45%.
  • US yields are higher, +2-4bps firmer across the curve, as Tsys lose the safe haven bid. 2yr yields are pressing marginally above 5%. This has helped drive yen underperformance. USD/JPY was last close to 154.70, although we haven't tested last week's cyclical high at 154.79 yet. There is also a reasonable option expiry at 155.00 for NY cut later ($1.4bn).
  • AUD and NZD are both higher, but away from best levels. NZD/USD is up near 0.40%, last close to 0.5915. Earlier highs were at 0.5929. Likewise, AUD/USD rallied to 0.6455 earlier, but we now sit back at 0.6435/40, still +0.30% firmer for the session.
  • Looking ahead, the Chicago Fed activity index for March, and the ECB’s Lagarde and BoE’s Benjamin speak. Key US data, including Q1 GDP and March core PCE prices, are released this week.
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The BBDXY sits around 0.10% lower in the first part of Monday trade, the index back near 1263. This keeps us within recent ranges for the index. Better risk appetite has weighed on USD sentiment today, as sentiment stabilizes/improves post Friday's dip.

  • Lack of fresh military action re Israel/Iran has aided sentiment, while the US house passing a weekend aid bill for Ukraine, Israel and Taiwan, has also been in focus.
  • US equity futures opened higher and have stayed in the green. We were away from highs in recent dealings, Eminis last around +0.30%, while Nasdaq futures were +0.45%.
  • US yields are higher, +2-4bps firmer across the curve, as Tsys lose the safe haven bid. 2yr yields are pressing marginally above 5%. This has helped drive yen underperformance. USD/JPY was last close to 154.70, although we haven't tested last week's cyclical high at 154.79 yet. There is also a reasonable option expiry at 155.00 for NY cut later ($1.4bn).
  • AUD and NZD are both higher, but away from best levels. NZD/USD is up near 0.40%, last close to 0.5915. Earlier highs were at 0.5929. Likewise, AUD/USD rallied to 0.6455 earlier, but we now sit back at 0.6435/40, still +0.30% firmer for the session.
  • Looking ahead, the Chicago Fed activity index for March, and the ECB’s Lagarde and BoE’s Benjamin speak. Key US data, including Q1 GDP and March core PCE prices, are released this week.