Euro/Dollar approaching parity

The euro has resumed its fall, after a brief respite on Friday, falling through the $1.01 level and now is trading just above $1.00, virtual parity with the greenback. The dollar was also rampant against sterling with the UK currency falling almost two cents to trade at $1.1850. As a result, the euro sterling cross was little changed at 84p

Equities opened the week on a sour note with most of the main indices closing down on the day. Equities have been very volatile but did manage small gains last week but a good chunk of those were lost on Monday with the Eurostoxx down 1% and the S&P 500 down 1.2%. The fallout from Elon Musk’s abortive Twitter takeover weighed on tech stock which saw the NASDAQ lost over 2% yesterday

That risk off environment saw bonds rally, yields have come back on both sides of the Atlantic as the market weighs up how much central bank can raise rates to tame inflation before killing off growth. US 10-year yields fell back nearly 10bps taking them back below 3% while German 10-year yields were also down about 10bps to just over 1.2%

Energy markets remain volatile with news that Russia has shut down the key Nord Stream 1 pipeline for routine maintenance with some German politicians fearful the line may not start back up again by July 21st as planned. This pipeline is key for German imports of gas and any prolonged shutdown will add to Europe’s problems

Data due today includes ZEW surveys in Germany, Irish property prices and NFIB small business optimism