For the time being, risk is remaining defensive.

  • 27 July, 2021
  • 1:00 pm EEST

China’s sour tones weighed on sentiment earlier, but the bleeding has halted now that local markets are closed.

As the focus now shifts to European trading and attention returns to the Fed tomorrow, this may be helping to see the pullback in risk trades abate significantly.

Also, keep in mind that Wall Street has a habit of turning things around, and I wouldn’t rule out that happening in the coming session. With equities near all-time highs and the month-end in focus, some caution is warranted rather than relentless purchasing.

US futures are still sitting lower, with S&P 500 futures down 0.4%.
10-year Treasury yields are lower, down a little over 2 bps to 1.254% but off the earlier low of 1.241% at least. In FX, the dollar and yen are the two gainers with commodity currencies still on the defensive but off earlier lows as well for the time being.
EUR/USD keeps just below 1.1800 still, sticking with the narrow range in the past week or so while USD/JPY is off a low of 110.00 at around 110.10-15 now.

Reliable Trading since 2012