Equity markets remained defensive ahead of Fed Chair Powell’s speech tonight, the S&P500 down 0.5%. Bond yields are higher, while the US dollar is little changed.

Sentiment was subdued amid China’s rising Covid cases and holiday-thinned US markets. The S&P500 closed unchanged, the US dollar firmed slightly, and bond yields were volatile but little changed.

The AUD and NZD rose slightly further in a US-holiday thinned overnight session, the US dollar weighed down by expectations the Fed will slow the pace of rate hikes.

Bond yields and the US dollar fell after some weak US activity data. The S&P500 is up 0.6%.

Risk sentiment improved as bond yields receded, the S&P500 up 1.0%. The US dollar fell. There was little fresh news of note.

Risk sentiment weakened on China’s Covid wave, the S&P500 down 0.5%. That, and slightly higher bond yields, boosted the US dollar.

Bond yields and the US dollar rose after more hawkish Fedspeak, although equities were resilient, the S&P500 closing up 0.5%.

Bond yields and the US dollar rose after some hawkish Fedspeak, while equities softened slightly, the S&P500 down 0.3%.

Equity sentiment soured slightly following some strong US retail sales data and hawkish Fedspeak, the S&P500 currently down 0.7%. That helped cap the AUD and NZD, while long maturity bond yields fell on expectations the Fed would slow the US economy further.

In a volatile session, the US dollar initially fell further following softer producer inflation data, although mixed Fedspeak and news of missiles reaching Poland caused a retracement. The S&P500 is currently up 0.8%.