The equity markets had a good day yesterday, especially in the US, as further good data helped buoy sentiment and keep the US treasury yields moving to the topside with 3.1% not far off now. Despite the move in the yields, the dollar remained steady as various geopolitical factors continue to dominate moves across the world of Foreign Exchange. The euro came under pressure again last night as Italy moved closer to a populist government that looks to have the potential to cause rifts with the EU. Cable recovered with talk of a solution on the EU customs union post-Brexit while commodity currencies gained well against the greenback and on the crosses despite steady trading conditions in the actual commodities.
Looking ahead to today’s trading and the Aussie will once again come under scrutiny in the Asian session a with the release of the latest Jobs data. Market expectation is for an increase of 20, 000 jobs in April and despite last night's recovery in the AUD/USD, any weaker print in this number or increase in the Unemployment Rate - expected to remain constant at 5.5% - will see it back under 0.7500 and heading for recent lows quickly.
It’s relatively quiet in terms of economic data releases in the London time zone and indeed into New York with only the Philly Fed and weekly unemployment claims to trouble the scorers. So once again we’re expecting further developments on geopolitical and trade issues to be the main driver across the markets.