Sentiment largely blended throughout main asset courses

Sentiment trades fairly mixed across major asset classes as we head towards the cash open.

That isn’t really surprising in a week like this where everyone is hesitant to put on risk while they wait for next week’s jobs data to get more clarity on the pace of Fed cuts.

FX: In FX the AUD is leading the pack to the upside (but the strength isn’t something I really agree with after this morning’s CPI), while the JPY is the laggard after comments from BoJ’s Himino which shared the same cautious views about ‘unstable’ markets and how that might impact policy.

Equity futures: China is having a bad day with the CN50 and Hang Seng both down by a decent margin, and even though EMEA and US equity futures are all trading in the green, the moves are marginal. The ES has basically not gone anywhere since the 20th.

Bonds: In fixed income, we’ve seen upside for 2-year treasuries (downside for yields) following a decent 2-year note auction last night, which calmed some nerves about issuance below 4.0%.

Commodities: Trading in the red across the board (apart from Natgas which as usual has a mind of its own). Quite surprising to see oil push lower after a -3.4M private inventory draw overnight, and makes me less excited about today’s EIA data release.

All in all, the holding pattern trading continues as markets await more news on the US labour market.