The U.S. dollar appears weaker across the board Tuesday as New York traders return from the holiday weekend, but this is mostly a function of its modest bounce Monday.

The greenback is near levels seen just before the weekend. The euro is slightly stronger, while sterling is slightly weaker. The dollar is a bit firmer against the yen and little changed against the Swiss franc. The dollar-bloc is having a strong showing, following strong trade figures and a Reserve Bank of Australia statement that recognized continued strength in output and inflation forecasts. The underlying tone of the dollar is soft, but the market appears to in need of fresh news and appears to be looking for new reasons to reduce long dollar exposures.

The new month and quarter is seeing some risk-taking return. The MSCI Asia-Pacific Index rose about 1.4%, its biggest gain in two weeks. Shanghai's Composite Index led with a 2.09% gain. Oil and gas, health care and basic materials led the way. Financials underperformed and some linked this to comments by Harvard's Kenneth Rogoff's comments warning that the property market is beginning to collapse. European bourses were mostly 1.5%-2.5% higher. Basic materials and financials are posting the best gains, while consumer services and health care are laggards.

The firmer equity tone and higher commodity prices are sapping the core bond markets of a safe-haven bid. Ten-year benchmark yields are 2% to 5%higher in Japan and Europe. Spain's 10-year sale looked priced at about 195 basis points above swap rates compared with about 56 basis points back in January. However, new reports indicate that Spanish banks bought almost 85% of net Spanish sovereign debt issued in May.

U.S. Treasuries were little changed.
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