The mood in FX is reflecting more calm as the dollar has seen gains erased with EUR/USD flat at 1.1373 while the aussie and kiwi are pushing close to the highs for the day at the moment, as outlined earlier here.
There was a bit of a knock after the Ukraine accusation came out here but we’ve quickly reverted back to a calmer stance among major currencies. That said, the yen is keeping firmer as well with USD/JPY down 0.4% to near 115.00.
I would argue the yen move is more reflective of the mood in equities and bonds, which are hinting at a more defensive risk tone. European indices are mixed and fairly pensive while US futures are pointing lower on the day. S&P 500 futures are down 0.5%, Nasdaq futures down 0.7%, and Dow futures down 0.5% currently.
Meanwhile, 10-year Treasury yields are down over 3 bps to 2.01% but that is at least off earlier lows of around 1.96% after the initial accusation by Russia on the Ukraine military launching a mortar attack.
Elsewhere, oil is down over 2% to $91.50 in a bit of a back and forth session, with prices dragged lower as an Iran nuclear deal draws closer. Then we have gold, which soared to above $1,890 to fresh eight-month highs amid the ongoing headlines from Russia and Ukraine – now trading at $1,884.
It’s tough to square the entire market mood at the moment but if stocks and the bond market are to be right, we could be greeted by some hints of risk aversion when Wall Street enters the fray later. We’ll see though. Headlines are still everything at the moment.