From Marc to Market:
The robust US jobs report at the end of last week had arrested the down
draft seen the previous week in response to the disappointing Q2 GDP report.
The mostly sideways movement has given way to a broader pullback today.
The greenback is heavier against all the major and most emerging market
currencies today.
There does not appear to be a fundamental driver, which does not mean
that the dollar's losses cannot be extended.
The US economic calendar is light with mortgage applications, the JOLTS report
on job openings, and the monthly federal budget, which do not have the heft to
change trends. It is true that the probability of a Fed hike in September
has eased to 24% from 26% at the end of last week, but for all practical
purposes, it is a difference without significance.
If there is an overarching theme, it is that rates will be lower for
longer, globally. This may be
underwriting risk taking, though equity markets are mixed. Still, the
MSCI Emerging Market equity index is up 0.4%,m extending its streak to the
fifth consecutive session. It is at its best level since July
2015. Although the Japanese and Chinese markets slipped lower
earlier today, the MSCI Asia Pacific Index also extended its advance.
Since July 22, the index has only been down in two sessions.
European bourses are mixed, and this is leaving the Dow Jones Stoxx 600
practically unchanged in late-European morning turnover.
Financials are the strongest sector (+0.4%), and within it, the insurance
sector is leading with a 0.8% advance and banks are up 0.4%. The FTSE's
Italian bank index is up 1.4% to extend its recovery into a fifth
session. ...
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