"Reports that Chinese financial institutions could curb exposure to US treasuries affected sentiment. While this does not signal an outright retreat from US assets, it could fuel some caution. Attention now shifts back to US data, which could help re-anchor expectations around Federal Reserve monetary policy. Later today, the ADP weekly employment report is due, following a modest gain of 7.75k in the previous release."
"In an environment where the resilience of the labour market is increasingly being questioned, any downside surprise could heighten caution ahead of Wednesday's nonfarm payrolls report and pressure both the dollar and treasury yields. Recent comments from Director of the National Economic Council Kevin Hassett added to this cautious backdrop, as he warned that job growth may slow in the coming months. US retail sales data will also be released, with growth expected to slow to 0.4% from 0.6%."
The dollar steadied after two sessions of declines amid concerns about waning appetite for dollar-denominated assets. Reports that Chinese financial institutions could curb exposure to US Treasuries dented sentiment and could prompt caution without signaling an outright retreat from US assets. Market focus has shifted to upcoming US data to re-anchor expectations around Federal Reserve policy. The ADP employment report and Wednesday's nonfarm payrolls could trigger downside surprises that pressure the dollar and Treasury yields. Slower retail sales and warnings of slowing job growth would reinforce expectations of policy easing and weigh on the dollar.
Read at London Business News | Londonlovesbusiness.com
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