An improvement in broader market sentiment — reflecting a moderation in market participants’ concern over Thursday’s events in Ukraine and Israel — has provided for a modest risk-on tone, supporting gains among the high-beta and growth-sensitive commodity currencies as GBP and EUR consolidate while JPY weakens. The US 10Y yield is rising from Thursday’s six-week low (bottom chart) and equity futures appear to have found some near term support after hitting three-week lows early in the Asian session. Meanwhile, gold prices appear to be softening following Thursday’s geopolitically-driven rally. China’s house price figures have highlighted a pace of deterioration not seen since early 2011, weighing on copper prices as market participants con-sider housing inventories and corporate default risk in the construction industry. Friday’s focus will shift to consumer sentiment, with the pre-liminary release of the U. Mich. Confidence index—expected to improve modestly, as market participants also look to the Conference Board’s leading index.
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