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Yield Retreat Helps Major Pairs Toward Key Levels

CROSS ASSET
  • Fading greenback following the Treasury yield curve here, as the 10y yield plumbs new lows and helps prop EUR/USD back toward the post-payrolls high on Friday at 1.0998 - which marks the interim resistance in the pair.
  • A number of USD levels are now being tested, keeping market focus on 1.2770 in GBP/USD, 143.81 in USD/JPY - while EM currencies are outperforming, aiding MXN, HUF and others to new daily highs. Break of these marks into the Monday close would be carefully watched for position-setting ahead of Thursday's CPI print.
  • Risk-on evident elsewhere, as the e-mini S&P adds to opening gains to show above intraday resistance of 4760.25, led by the Tech and consumer discretionary sectors, at the cost of defensive stocks and oil & gas names (pressured by softer WTI/Brent prices). Domestic focus shifts to the beginning of Q1 US earnings season, with close to 7% of the S&P 500 due this Friday and the next week.
  • While the tech-led NASDAQ is outperforming, it's got the furthest to climb to re-test the cycle best of Dec28, with another 3% needed to hit that mark vs. a ~1.7% gap in the E-mini S&P.

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