The market is cautious ahead of the release of U.S. GDP and the employment cost index. The U.S. 10year yield is dropping back towards its lows at 1.72; equities are weak and the USD is generally soft (except against CAD and a few LATAM currencies). Russia surprised markets with a 2% interest rate cut; but the market focus is shifting towards the U.S. as Chair Yellen was reported to have warned democrats that rate hikes were not immediate. Today the market is vulnerable to position squaring and month‐end flows.
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