The dollar may have been feeling a little sorry for itself this last week or two, but it now looks like it is getting over its March nonfarm payrolls hangover, and readying for another push across the board.
"We saw the dollar finally start to make a bit of a comeback Friday including against the euro which has been the strongest performer of late," says Saxo Bank's head of forex strategy, John J Hardy. "We will need to see some strong data out of the US this week to see if this can really deepen and broaden."
Not least of course will be this Friday's NFP where dollar bulls will hope to see the kind of print that confirms the long-term trend in the jobs report and makes March's disappointment look like a blip.
EURUSD was at 1.11867 at 0655 GMT.
One-month EURUSD at-the-money vols were certainly looking perky early morning having gone from 11.25 to 12.7 and opening the European session at around 13, says the FX Option desk's Dan Larsen, reporting live from the Copenhagen floor.
"The realised volatility is actually up at about 13.7 so vols in EURUSD are still looking cheap," says Larsen. "All eyes are on the NFP for this."
Get down
One currency against which the dollar looks very likely to strengthen is AUD, based on a prevalent assumption that the Reserve Bank of Australia will tonight deliver the 25 basis points cut so many had expected last month.
"AUDUSD was trading at 30 vols which suggests that the cut is being priced in," says Larsen. "If the RBA decides not to go through with it again, then you could see spot go back to 80 or above."
Hardy thinks that is unlikely, especially if US data is strong this week. "If US data is not strong, then AUDUSD could continue at the higher end of this recent rally cycle, but i'm still anticipating a move lower at some point towards the 0.7500 area at the next data cycle if it is not this one."
AUDUSD was trading at the 0.7850 mark in the early European session.
Greece again....
From the Floor had rather hoped the Greek debacle would have gone away by now, but if bunds are your thing, then you might want to reconsider as they have slipped from the highs of above 160 to 156.50.
"The bunds selloff continues on the back of better headlines coming out of the negotiations which may see some resolution at the ECB meeting on Wednesday," says Simon Fasdal from the Fixed Income desk.
That has helped Greek yields to head back below 20% from those near 30% highs of a week or two ago.
"There is lots of stress still but the situation is a lot more relaxed than it has been in the last couple of weeks," says Fasdal. "We may see this flow into the periphery markets which we can also expect to perform."
Fasdal is puzzled that risk-on has not really seen a boost for equities markets. "If this is risk-on, why are equities not performing? The strong EUR has possibly cancelled out the expected equities push for now."
Helicopter view
From the Floor's not been up in the air for quite some time so was more than a bit thrilled when Peter Garnry, head of equities strategy at Saxo Bank, offered his helicopter view of the global equities market.
"Global equities are, for the first time since 1996, up above historical averages," says Garny. "it means we are moving into new territory and it will be interesting to see how this plays out."
Garnry's sweep across the landscape nevertheless confirms his long-held belief that global equities continue to be a good place to be in. "Dividend yields are still up at more than 2% which compares favourably with below 1% for the G10 and G7 countries."
Kicked it
From the Floor previously reported on what a tough time Adidas (XETRA:ADSGN) was having on the back of sanctions of Russia where it has a sizable business. Fast forward a few months and the anticipation ahead of today's Q1 results is altogether far more favourable.
"Adidas is up 2% pre-market so it looks like it is doing rather well after they were hit by a lot of volatility from the Russian situation," says Garnry.