Even though treasury yields are retreating mildly today, stocks are staying in red in Europe and Asia. US futures point to a recovery but it’s unsure if the rebound could sustain before close. Investors are digesting comments from central bank officials regarding surging real long term rates and inflation. In particular, an ECB official noted that policy stimulus might need to step up if yields could remove effective support prematurely. BoE chief economist also warned that out of control inflation is currently the greater risk.

In the currency markets, Australian and New Zealand Dollar are currently the worst for the day, together with Sterling, on liquidation of risk-on trades. Dollar is the strongest one, followed by Yen and Swiss Franc. Technically, EUR/USD’s break of 1.2108 minor support is a sign of weakness, but it remains relatively resilient elsewhere. Gold is still defending 1760.46 support after breaching it earlier today.

In Europe, currently, FTSE is down -1.70%. DAX is down -0.41%. CAC is down -0.97%. German 10-year yield is down -0.029 at -0.258. Earlier in Asia, Nikkei dropped -3.99%. Hong Kong HSI dropped -3.64%. China Shanghai SE dropped -2.12%. Singapore Strait Times dropped -0.82%. Japan 10-year JGB yield rose 0.0057 to 0.158.

Source: www.actionforex.com