A look at the day ahead in European and global markets from Tom Westbrook:<\/p>\n
Having just closed out its worst month since 2010, the dollar’s bull run may be ending.<\/p>\n
Federal Reserve Chair Jerome Powell green-lit selling this week, surprising traders by not pushing back against markets’ shifting financial conditions looser in the last few weeks.<\/p>\n
Since the Fed hiked 75 basis points in November, 10-year Treasury yields have fallen more than 50 basis points and mortgage rates have followed — erasing a fair chunk of the tightening.<\/p>\n
Tracking yields lower, the dollar is heading towards the weekend down heavily on the yen for the week and eyeing smaller losses on the euro and most other currencies.<\/p>\n
The next test is Friday morning’s U.S. jobs report, where a downside surprise could rip the dollar down further. Economists expect about 200,000 jobs were added last month.<\/p>\n
More than that, and it might put a leash on the bond rally and the brakes on the dollar’s slide.<\/p>\n
Markets in Asia were treading water ahead of the figure, and clinging on to optimism about China reopening – except in Japan where gains in the yen provided an excuse for profit taking in the stockmarket and the\u00a0Nikkei<\/a><\/span>\u00a0dropped 1.7%.<\/p>\n Stock buying, rocketing local rates and the retreat in the dollar also seem to have finally given a bid to the Hong Kong dollar, which has bounced from the weak end to the middle of its trading band.<\/p>\n