Late last week traders began to look at the MH17 tragedy as an opportunity for to forge a peace deal but aggressive rhetoric returned on the weekend and risk trades faded. Overall moves were small but the Swiss franc led the way while the Australian dollar lagged. The Aussie will remain in focus with speeches from the RBA's Stevens and Debelle later.
At the moment the Ukraine story is all about tone. On Friday, Obama resisted the temptation to point fingers at Russia and a call for peace from Putin raised hopes that the Malaysian Airlines disaster could be the event that ends the violence. But on the weekend Secretary of State Kerry ramped up rhetoric and Russia began a campaign to spread the blame.
European stock markets soured to start the week and US 10-year yields fell once again, hitting as low as 2.445%. That put some pressure on the yen and boosted oil prices.