Here is what you need to know on Monday, April 4:
There seems to be a positive shift in risk sentiment at the start of the week as investors, once again, turn optimistic about a diplomatic solution to the Russia-Ukraine conflict. The economic docket will not be featuring any high-impact data releases on Monday and market participants will remain focused on geopolitical headlines. The US Dollar Index stays relatively quiet near the mid-98.00s supported by a more-than-1% rise in the benchmark 10-year US Treasury bond yield and the US stock index futures up around 0.2%.
Over the weekend, a top Ukrainian negotiator said they have reached an agreement on enough elements of a potential peace agreement that it is ready to be discussed between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky. Meanwhile, US Secretary of State Antony Blinken said that the west could lift sanctions on Russia depending on the outcome of the upcoming negotiations.
EUR/USD is moving sideways in a tight range near 1.1050 early Monday. Earlier in the day, the data from Germany showed that the trade surplus narrowed to €11.5 billion in February from €11.6 billion in January, compared to the market expectation of €9.6 billion, but failed to help the euro find demand.
GBP/USD edged higher in the European morning and was last seen trading near 1.3130. Bank of England Governor Andrew Bailey is scheduled to deliver a speech at 0905 GMT.
After fluctuating wildly last week, USD/JPY stays calm on Monday and trades in positive territory above 122.50. Japan’s Deputy Chief Cabinet Secretary Seiji Kihara voiced his support for the Bank of Japan's (BOJ) ultra-loose policy. "It's hard to tighten monetary policy to deal with cost-push inflation, which means the monetary policy must remain loose," Kihara said and added that loose policy was necessary amid fragile economic recovery.
Gold started the new week under modest bearish pressure and declined toward the lower limit of last week's range. Rising US T-bond yields and the improving market mood weigh on the yellow metal so far on the day.
USD/CAD trades in the red near 1.2500 after closing the previous two trading days higher. The Bank of Canada will publish its Business Outlook Survey later in the day.
Bitcoin is having a tough time making a decisive move in either direction and fluctuates near $46,000 early Monday. Ethereum reached its highest level since the first week of January at $3,580 on Sunday but returned to the $3,500 area.
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