February 9, 2023

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It is a rather empty calendar day in Europe today

2 min read

A couple of bank holidays to boot as well

The absence of data releases in Europe will continue to put the scrutiny on risk sentiment, with the bond market set to stay in the driver’s seat once again.

Treasury yields spiked higher after the sizzling CPI report yesterday and that kept a solid bid in the dollar in the aftermath. Things are looking calmer today with FX little changed and equities finding some stability but it may very well heat up again soon enough.

10-year yields are steady at 1.685% while US futures were higher earlier but have pared back some of those gains to keep little changed ahead of European trading.

It has been a rough week for equities but a healthy flush/correction if one is to argue given how things have been looking rather stretched following fresh record highs last Friday. That said, the bleeding may not be over just yet as technicals are in question.

Tech in particular is showing vulnerabilities but inflation fears are also starting to reverberate elsewhere. The Dow suffered its worst day since January while the S&P 500 fell by the most since February, but the Nasdaq was still the biggest loser.


Expect more bouts of volatility to follow in equities with dip buyers trying to get back into contention, though technicals may make that tougher for the time being.

In observance of Ascension Day, it is a bank holiday in Switzerland, Germany, and France so that is likely to keep things quiet in Europe before we get into another debate on inflation when US PPI data for April is due later at 1230 GMT.

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