WTI crude oil took a tumble and broke below support at $85, but fundamentals remain intact.

The main focus for yields right now, in the short-term at least, remains on the very important incoming US data like the ADP employment report, ISM services PMI, and Friday’s non-farm payrolls report.

The Reserve Bank of Australia (RBA) kept rates on hold at 4.1% during today’s Asia-Pacific session, as expected. The bank also left the door open to more hikes if necessary. However, the market reaction was a tad surprising, with the AUD seeing a chunky move lower despite no surprises from the bank.

The past week was a tumultuous one for the capital markets, with bond yields surging, stocks falling, and the dollar gaining strength.

The other asset to watch is gold as a big miss in the data could give gold a decent nudge higher if both the USD and yields pull back a bit. Just take note momentum on gold is firmly to the downside so adjusting risk accordingly is important.

Sentiment recovers slightly as yields take a breather. Equities bounce, but VIX above 200DMA keeps markets cautious

The past week was a whirlwind of monetary decisions, punctuated by announcements from nine central banks, surrounded by early-week CPI results and concluding with Friday’s PMIs.

quities remain under pressure, with futures like the ES, NQ, and STOXX50 testing major support levels. A break and close below these levels could open up more selling pressure.

The GBP has struggled in early European trade after the latest batch of UK CPI data printed much lower than what markets had anticipated.

The DXY remains stuck near the 105 psychological level as markets are eagerly awaiting tomorrow’s FOMC policy decision. On a positioning basis, the USD has been looking a bit stretched looking back over the last 52 weeks with institutional long positions looking a bit on the stretched side.

Looking ahead, the upcoming week promises to be anything but dull, with nine central bank policy decisions slated for announcement.

EUR remains on the backfoot after yesterday’s dovish ECB policy decision. The European Central Bank (ECB) raised interest rates yesterday, but also signaled that they have reached a “sufficiently restrictive” level of rates. This sent the EUR lower across the board.