USD

Market today was a quiet affair so far, as the sentiment was mainly driven by the risk-recovery in the Asian equities and US equity futures, as the fears over China economic slowdown and trade war retreated. Amid risk reset, the US dollar stuck to its recent bearish bias and traded broadly subdued.

The USD/JPY pair faded a bounce to 110.25 and entered a consolidative phase near the 110.00 handle, as the US recession fears continue to outweigh the BOJ’s accommodative monetary policy stance. Among the European currencies, both the Euro and the GBP traded modestly flat, having given away early gains, as a lack of Brexit clarity continued to remain a drag, despite the UK Parliament’s takeover of the Brexit process for a day.

The European session today remains data-light, as the developments around the Brexit process remain the focus that will offer fresh trading impetus to the EUR, and GBP traders. From the UK docket, the second-liner BBA mortgage approval data will be reported at 09:30 GMT.

The NA session has meaningful macro updates from the US, including the housing starts and building permits due at 12:30 GMT. Later at 14:00 GMT, the US Conference board consumer confidence data will be closely eyed for fresh dollar trades, as markets continue to track the US yields for fresh directives on the overall market sentiment. Meanwhile, oil traders will look forward to the US API weekly fuel stocks report that will be published at 20:30 GMT.

Oil is on the backfoot at the start of the week amid concerns over global growth and the US economy now under scrutiny. WTI is currently trading at $58.91 and sentiment is favouring a risk-off environment of which oil will always struggle within when major global economies are seen to be moving towards a recession which would likely weigh on energy demand.

Gold has picked up a considerable bid as markets remain troubled by a bearish diversion in yields. Bulls, however, failed to capitalize on the positive momentum, rather opted to take some profits off the table during the Asian session amid some initial signs of stability in the global financial markets and recovery in other riskier assets. Meanwhile, a subdued US Dollar price action extended some support to the dollar-denominated commodity. This coupled with the ongoing Brexit drama and uncertainties over the US-China trade negotiations might further collaborate towards limiting any sharp corrective slide.