The US dollar is trading slightly softer against most G10 currencies, though it retains strength versus the Japanese yen as the North American session begins, with Japanese and Chinese markets still closed. Apart from the Reserve Bank of Australia delivering its third rate hike this year, the news flow is relatively muted. The Strait of Hormuz remains effectively closed despite some claims to the contrary, while oil prices continue to consolidate near the upper end of recent ranges. In the US, much of today’s economic data is already known, leaving the April ISM services index as the key fresh release.

Asia Pacific Markets

Trading in Asia Pacific is subdued due to ongoing holidays in China and Japan, though other regional markets show mixed performance. South Korean equities surged sharply, gaining more than 5%, while Taiwan’s market posted moderate gains. The Australian dollar retreated from near multi-year highs as traders squared positions ahead of the central bank decision, briefly slipping before stabilizing. The Reserve Bank of Australia’s latest rate increase has overshadowed incoming data, with markets now expecting further tightening later in the year despite signals that policymakers may pause in the near term.

European Markets

European equities are recovering, with the Stoxx 600 rising about 0.5% and recouping roughly half of the prior session’s losses. Bond markets are generally firmer, as yields across much of Europe edge lower, though UK gilts stand out with a noticeable rise following a holiday delay. Currency moves remain cautious: the euro holds above recent lows after extending its decline, while sterling attempts to stabilize after sharp losses, encountering resistance nearby. Overall, sentiment in the region is steady but restrained, with markets adjusting to recent global developments.

American Markets

US equity futures are stabilizing, trimming earlier declines as investors assess a busy but largely backward-looking data calendar. Treasury yields are slightly lower, though the longer end remains elevated, reflecting a rise in expectations for the Fed’s year-end rate level. Fed funds futures have shifted notably, now assigning a modest probability to a rate hike rather than a cut. Commodity markets show consolidation, with oil trading below recent highs while gold rebounds after recent weakness. The focus turns to the ISM services report as the primary new indicator for market direction.