From Marc Chandler at Bannockburn Global Forex:
Overview: The dollar’s downside correction continues today, helped by hawkish signals from the Reserve Bank of Australia and unnamed sources who have played up the chances of a 50 bp hike by the European Central Bank on Thursday. Asia Pacific equities were mixed, and mostly lower after the losses in the US yesterday. The prospect of a more aggressive ECB is weighing on European equities. The Stoxx 600 is slightly lower after rallying 2.7% in the past two sessions. US futures are higher. Key levels to watch are Friday’s high for the S&P 500 and NASDAQ (~3796 and 11280, Friday’s high and the bottom of the open gaps, respectively). The 10-year US Treasury is flattish near 2.98%. European benchmarks are narrowly mixed, but the peripheral premiums have narrowed slightly. The Scandis are leading the move against the dollar, gaining around 1.5% today. The Antipodeans are up about 1.25%. The Canadian dollar is posted the smallest gain among the majors and is up about 0.3%. Emerging market currencies are all higher, led by central European currencies, except the Turkish lira, which is off about 0.6%.
The dollar’s pullback may be helping gold steady. It has been off for the past five weeks. It is up around $5 near $1714.50. September WTI rallied 5.1% yesterday, the most two months and is slightly lower today. US natgas is edging higher after rallying almost 13% in the past two sessions. The heatwave has spurred talk that the US may declare a weather emergency this week. Europe’s natgas benchmark is up about 2.5% after firming a little yesterday. China’s Covid flareup took the steam from iron ore prices. After rallying nearly 4.4% yesterday, it is off almost 4% today. Copper is also seeing yesterday’s gains pared. September copper is off 1.25% after a 3.5% rally yesterday. September wheat snapped a five-day drop yesterday, rising 4.6%. It is offered today and is down about 0.4%....
....MUCH MORE
