GBP

The dollar steamroller ground to a halt over the long weekend, but appears to be getting a small push from worsening risk sentiment as markets reopen this morning. Treasury yields are pushing higher, equity futures are down, oil prices are slumping, and risk-sensitive currencies are back on the defensive in foreign exchange markets. A surge in optimism among British businesses is lifting the pound. An update published this morning showed the S&P’s composite purchasing manager index climbing to 53 in early February from 48.3 in the prior month, firmly above the 50 threshold that separates expansion from contraction, and sufficient...

A sense of caution is settling over financial markets this morning, with North American equity futures setting up for a weaker open, commodities under pressure, Treasury yields rising, and the dollar in recovery mode. Markets went on a bit of a drunkard’s walk after yesterday’s print. Risk sensitive assets rallied in the moments after the release as investors found their worst fears had not been realized, but then seemed to fall as stubbornly-strong services prices lowered the likelihood of a meaningful Fed pivot in the months ahead. Oscillations continued throughout the day as position adjustments unfolded and traders struggled to...