Choppy start to the week as markets focus on geopolitics, US yields

Here is what you need to know on Monday, April 11: 

The greenback started the new week on the back foot and the US Dollar Index (DXY) opened with a large bearish gap. The negative shift witnessed in risk sentiment early Monday, however, helps the dollar regather its strength. Additionally, US Treasury bond yields continue to rise amid aggressive Fed policy tightening prospects. The economic calendar will not be featuring any high-impact data releases and investors will keep a close eye on Fedspeak.

Russia had reportedly continued shelling the Donetsk and Luhansk regions in eastern Ukraine over the weekend. Moreover, White House national security adviser Jake Sullivan said on Sunday that Ukrainian forces were able to push back Russian troops successfully so that they were forced to retreat and regroup. There are no headlines pointing to any progress on peace talks and market participants remain on edge.

US stock index futures were last seen losing between 0.5% and 0.7%, reflecting the risk-averse market environment. The DXY clings to small daily gains slightly below 100.00 and the benchmark 10-year US T-bond yield is up more than 2% at 2.76%. 

Meanwhile, Emmanuel Macron has won the first round of the French presidential election with 27.6% of the votes, compared to 23.4% for Marine Le Pen. Two candidates will face each other again in the second round. The latest Ipsos poll shows that Macron is leading Le pen, 54% vs 46%, in the second round.

After registering its lowest weekly close in nearly two years below 1.0900 on Friday, EUR/USD opened with a large bullish gap but erased its gains during the Asian trading hours. The pair was last seen trading little changed on the day at around 1.0880.

GBP/USD is having a difficult time staging a convincing recovery and stays within a touching distance of 1.3000. The data from the UK showed on Monday that the British economy grew by only 0.1% in February, missing the market expectation of 0.3%.

USD/JPY regained its traction on rising US Treasury bond yields and was last seen trading near 125.00.

Gold attracts interest as a safe-haven early Monday and stays relatively resilient despite rising US yields. As of writing, XAU/USD was fluctuating in a narrow channel above $1,940.

Bitcoin stayed quiet over the weekend but ended up losing nearly 10% on a weekly basis. BTC/USD is moving sideways above $42,000 early Monday. Ethereum staged a rebound on Saturday but erased those gains on Sunday before going into a consolidation phase near $3,200 at the beginning of the week.



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