There is a light rebound in risk trades so far today, following the massacre in trading yesterday.
Equities – tech especially – were routed badly with the S&P 500 falling by 3.2% and Nasdaq falling by 4.3%. The charts certainly paint a rather dreadful picture for US stocks at the moment:
The S&P 500 is contesting a break below its 100-week moving average (red line) with little in the way of a push towards the 38.2 Fib retracement level support @ 3,815. Meanwhile, the Nasdaq is looking to post a sixth consecutive weekly drop – the first since 2012 – and heading towards the 50.0 Fib retracement level support at 11,421.Sentiment is still on a knife's edge so the light reprieve going into Europe may yet prove to be fleeting. The dollar has made a decent advance against commodity currencies yesterday with USD/CAD pushing past 1.30 and AUD/USD falling past 0.70. Those will be key pairs to watch in the sessions ahead.Safety flows helped to see bond yields drop by a fair bit and the retreat is continuing a little for now. 10-year Treasury yields are down 4 bps to 3.04% and we'll see if yields can hold above the pivotal 3% mark this week.There won't be much on the agenda in Europe to shake things up so the risk mood will continue to dictate trading sentiment in the session ahead.0900 GMT – Germany May ZEW survey current conditions, economic outlook1000 GMT – US April NFIB small business optimism indexThat's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.