Headlines:Risk on the mend but is it just a fleeting moment?EU’s Borrell: We continue to discuss sanctions, there are still some difficulties pendingUS April NFIB small business optimism index 93.2 vs 93.2 priorGermany May ZEW survey current conditions -36.5 vs -35.0 expectedUAE energy minister: Oil market is balanced, no need to pump moreMarkets:JPY leads, NZD lags on the dayEuropean equities higher; S&P 500 futures up 0.6%US 10-year yields down 8 bps to 2.998%Gold up 0.5% to $1,862.68WTI crude down 1.0% to $102.05Bitcoin up 2.5% to $31,700It was a quiet session for the most part as risk sentiment bounced back or at least steadied a little in the aftermath of yesterday’s bloodbath.European indices are settling higher though gains are still barely halving yesterday’s drop while US futures are up slightly but without any real conviction to turn around the sharp decline in Wall Street yesterday.It is still early in the day so the latest bounce may yet be a tentative one. The bond market is seeing some added bids, continuing from yesterday with 10-year Treasury yields testing 3% again at the moment.In FX, the dollar is keeping more mixed but is little changed overall amid some pushing and pulling. The greenback was weaker early on as risk recovered but is holding its ground for the most part now ahead of US trading.EUR/USD is not much changed, lingering around 1.0550-60 levels while GBP/USD is up just 0.1% to 1.2340 currently.USD/JPY is seeing a slight retreat from 130.20 to just below 130.00 as bond yields also fall back a fair bit. Elsewhere, AUD/USD is keeping flattish around 0.6950-60 levels mostly while USD/CAD is seen flirting with a firmer break of 1.3000. Both the aussie and loonie are looking vulnerable but amid a steadier risk mood are able to hold on for a bit more at the moment.

Resolutely focused on restoring price stabilityWe have a „sizzling“ hot labour marketFed task is difficult but not insurmountableFed actions will cool demand and factors contributing to supply shortages will be resolvedFed needs to be data dependent, adjust policy actions as circumstances warrantIt sounds like the string of 50 bps rate hikes is still the right call for the time being at least. Williams also adds that he expects PCE core inflation to be around 4% this year before falling to 2.5% next year. That is likely an outlook shared by most Fed policymakers and how they are going about the outlook for the Fed funds rate at the moment at least.

The struggle for solidarity continues for Europe. Borrell says that he hopes this can be resolved by next week’s foreign affairs council meeting but I don’t think one should hold their breath.

Prior 93.2US small business confidence was unchanged last month after three straight monthly declines but high inflation pressures and worker shortages continue to weigh on sentiment for the most part. Of note, 32% of businesses reported that inflation was their single most important problem – the largest share since Q4 1980.

There’s just one particularly significant one to take note of for the day, as highlighted in bold.That being the large chunk for USD/CAD at 1.2935, although it may not serve as too much of an attraction to price action considering that dollar bulls are pushing the boundaries of 1.3000 since yesterday. The lack of technical significance won’t help with the expiry level.If anything else, just be mindful that there will be some large expiries rolling off tomorrow as well for USD/CAD with the ones to watch being perhaps between 1.2950 and 1.3000.For more information on how to use this data, you may refer to this post here.