Themes

• General mood is “risk off”
• U.S. stocks held firm over the session, posting gains, but held below recent highs
• USD strength a strong theme in currency markets overnight

What’s Moving
The story was all the Dollar overnight, with the USD/JPY hitting a four year high. The gains were attributed to comments from Fauci that it is conceivable that COVID will be downgraded in the U.S. from pandemic to endemic. The USD firmed against all the majors, posting strong gains against the Yen and the Euro.
Sterling was also strong on the day, with a better-than-expected U.K. Jobs report increasing hopes of a U.K. rate hike.
Gold and oil were both slightly weaker on the day on switching into the USD continued.

Thoughts
Data in Asia today sees Japanese Machinery Orders, which will be the focus of trade in this session. We are expecting some consolidation of USD gains in Asia today, while bargain hunters should put a floor below the current gold price.

Pivot Points