European Political Risks in Focus as the Week Begins, Euro Seeks Lower Ground

The week has started with a preference for dollar buying. The market responded sharply to last week's U.S. employment report, which showed a significantly higher-than-expected increase in nonfarm payrolls and wage growth. Weak aspects such as the rising unemployment rate and declining labor force participation were overshadowed.

Additionally, European political risks are surfacing, adding to the pressure to sell the euro. The weekend's European Parliament elections saw a surge in far-right factions, with the ruling parties in France and Germany both losing, creating uncertainty about the future. French President Macron has announced the dissolution of the National Assembly and new elections. This move could be seen as a political gamble to regain control.

The initial focus will be on how far European bond selling progresses during the European session. Given the political risks, it's unclear if rising yields will lead to euro buying. European stock futures are down, and if a "sell Europe" sentiment prevails, the euro could face further selling pressure.

Today's overseas market releases include Turkish employment statistics (April), Turkish industrial production index (April), and Turkish current account balance (April). No major economic indicators are expected from the U.S., U.K., or Europe. However, it's worth keeping an eye on the New York Fed's one-year inflation expectations survey (May).

Key events include speeches by Bundesbank President Nagel and Austrian National Bank Governor Holzmann, who will open the "Future and Challenges of Central Banking" conference. U.S. Federal Reserve officials are in a blackout period, refraining from making statements about monetary policy. The U.S. will conduct a $58 billion three-year bond auction.

Today, there's significant selling pressure on the euro. If there is a retracement, I plan to look for selling opportunities.