Risk assets continue to perform well, where the short term improvement in Chinese data and commodity bounce have encouraged investors to put money back to work – particularly in EM. Sovereign issuers have been quick to take advantage of this window, with Argentina’s US$16.5bn bond sale four times over-subscribed. We note, however, that the dollar has started to find a little support this week and see US swap rates creeping higher as the external environment is perceived as less of a headwind to the Fed. But on balance it looks too early for the Fed to push ahead with normalization (e.g. signalling a June hike next week) and the bullish risk environment can continue. DXY has found support at 94.00 and may drift a little higher ahead of Wednesday’s Fed.Yesterday’s ECB meeting brought the expected calm after several months of storm. Draghi stressed the ECB’s willingness to do more in case the recovery falters or negative second-round effects of low inflation were to materialise. Well, yesterday some ECB watchers might have regretted that they did not enjoy one of the first sunny days of the year but stayed inside following a rather event less, not to say dull, ECB press conference. As expected the ECB did not announce any new measures, but sent a clear dovish signal, keeping the door open for additional easing in the future. The ECB’s macro-economic assessment remained unchanged from the March meeting. Risks to the economic outlook are still tilted to the downside and the inflation outlook also remains subdued. Consequently, there was no need for the ECB to change anything in its current monetary policy stance. Interestingly, ECB President Draghi sounded more optimistic about the pass-through of monetary stimulus through the banking sector, referring to the latest Bank Lending Survey. Nevertheless, the outlook for both growth and inflation is still shaky and uncertain enough for the ECB to stay on high alert. Price action wise, USD is still trying to gain ground though have not been able to do much yet. EURUSD grinding lower has helped the USD a bit and today’s negative lending rate comments from Japan pushed USD higher but looking at the broad picture USD has not gained against commodity currencies and Emerging Markets. Still the risk rally in EMFX has stalled, today Asian EMFX gave up some gains. Commodities remain strong but people have not heard much from yesterday’s ECB meeting and FOMC is creeping up on us next week, it seems this is tiem for some consolidation.