Headlines:Dollar, yen bid across the board on risk-off vibesBitcoin in big trouble as plunge below $30,000 looks to holdNo brakes on the Chinese yuan slide just yetECB’s Kažimír: Ready to hike in JulyECB’s Makhlouf: The era of negative rates is reaching its conclusionUK Q1 preliminary GDP +0.8% vs +1.0% q/q expectedSwitzerland April producer and import prices +1.3% vs +0.8% m/m priorMarkets:JPY leads, AUD and NZD lagEuropean equities lower; S&P 500 futures down 0.4%US 10-year yields down 7 bps to 2.844%Gold down 0.3% to $1,847.43WTI crude down 1.3% to $104.33Bitcoin flat at $28,411It is a risk-off day in markets in general but not without a side dish of drama in the crypto space.The infamous Tether lost its $1 peg today, following suit from Terra’s crash from its own $1 peg this week. That sent cryptocurrencies into a spiral with Bitcoin tumbling to $25,000 levels at one point before steadying a little.Elsewhere, the bout of risk aversion continues to carry on as well. European equities slumped and are down nearly 2% across the board in catching up to Wall Street losses yesterday while US futures are also keeping lower across the board, with tech lagging again.The bond market remains bid for a fourth straight day this week and that is keeping things more interesting but a key implication for currencies is that it is helping to bolster the yen after its freefall since March.USD/JPY is down 1% to 128.60 levels as the yen is the runaway leader in the FX space. The dollar is the other beneficiary from the risk-off mood as it is posting a solid advance across the board as well.EUR/USD is down 0.8% to fresh lows since January 2017, eyeing the 1.0400 level. Meanwhile, GBP/USD dribbled lower to 1.2165 before recovering slightly now to 1.2210 but still down 0.3% on the day.The aussie and kiwi are the laggards in a classic tale of risk aversion today, with AUD/USD falling 0.9% to 0.6875 now – its lowest since June 2020.In the commodities space, oil is also down a little over 1% at around $104 but is arguably still rather resilient. Meanwhile, silver is one of the more notable movers as it is down over 2% and falling below $21 for the first time since July 2020.

It is time to move to end of APP next month or in JulyCurrent level of inflation is concerningRealistic to expect that rates are likely to be in positive territory by early next yearECB continuing on a path towards normalisation of policyFor one of the dovish members to come out with such an angle, I think it is rather evident that there has been a perception shift within the ECB. A rate hike in July seems all but a given now. However, despite the many policymakers calling for the end of negative rates, it may yet be a case of one that is too early to call.

The official goes on to deny rumours of a city-wide lockdown and „quiet-mode management“, adding that there is no need to stock up on food and supplies. We’ll see how things go but for now, China is still nowhere near abandoning their supposed ‚zero covid‘ policy and that remains a tail risk for the global economy.

A look at European indices at the moment:

Eurostoxx -2.3%
Germany DAX -2.2%
UK FTSE -2.2%
France CAC 40 -2.3%
Spain IBEX -1.5%
Italy FTSE MIB -1.7%

It’s looking rough out there though for European stocks, they are in part playing catch up to the sharp decline in Wall Street yesterday. That said, the overall market mood today isn’t looking good either. S&P 500 futures are down 0.7%, Nasdaq futures down 1.1%, and Dow futures down 0.6% currently.
The S&P 500 looks set to seal a break below its 100-week moving average if this keeps up:

He makes mention in a tweet (as per below). Well, all expectations are pointing towards that and markets are also well primed for it at this stage.