Main points of the day

•     Risk-on mood continues

–    Stocks gain over 1% in Europe despite further deterioration of Ukraine situation

–    Equity rally continues in Asia

–    Less correlation among assets than previously; currencies moving independently

•     USD generally higher

–    Risk-on mode now does not mean an exit from USD; USD generally higher vs G10 currencies, mixed vs EM as some lagging EM currencies caught up yesterday

•     EUR/USD lower despite higher Eurozone stocks

–    Draghi identified “decline in short-term capital inflows” as one factor for a weaker EUR

–    Less money may be coming into European stocks from abroad = EUR negative

•     NOK, CAD biggest gainers over last 24 hours, but profit-taking started in Asian time – could continue today

•     NZD weakens on disappointing REINZ housing; no sign of bottom

•     Today:

–    Eurozone: German ZEW index expected to be lower = EUR-negative

–    US: NFIB small business survey for July expected to be higher; JOLTS survey for June to show small drop in job openings in payback after large gains in April and May