Global yields have stabilized, paving the way for a large rebound in risk assets, with the S&P500 having its best day in nine months. In terms of foreign exchange, G10 commodity currencies led the way, but the dollar held its ground despite poor demand for low-yielding assets. The Swiss franc remained a big laggard, as markets may have used the opportunity to unwind CHF long positions that had been built up during the pandemic. If risk assets remain supported, the USD/CHF could break above 0.9200. Asian equities have indicated that risk appetite is waning, and stock index futures in Europe and America point to a poor start. Data-wise, it's been a reasonably quiet day after a solid ISM Manufacturing report appeared to back up inflation fears. For the time being, with low-yielders bearing the brunt of any equity rally, the US dollar can prove resilient if risk assets return to positive territory.
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