From Marc Chandler at Bannockburn Global Forex:
Overview: The debt ceiling drama is not over. The agreement between the negotiating teams of President Biden and House Speaker McCarthy sets the stage for the next act in the drama: each side must deliver the votes. A preliminary vote today in the House of Representatives is likely today ahead of floor vote tomorrow. Still, the market is optimistic, and risk is favored. Asia Pacific bourses were mixed today. We note that the chip sector helped lift South Korea's Kospi up over 1%. Europe's Stoxx 600 is recouping yesterday's marginal loss, and US equity futures are trading higher. The S&P 500 and NASDAQ are poised to gap higher. Bonds are rallying. European yields are mostly 4-6 bp lower, though Gilts are lagging. The 10-year US Treasury yield is off nearly eight basis points to 3.72%.
The dollar is offered. Among the G10 currencies, only the New Zealand dollar and Swedish krona are nursing small losses. Sterling is doing best with a nearly 0.5% gain and resurfacing above previous support near $1.2400. The euro slipped through $1.07 but rebounded in the European morning. Emerging market currencies are mixed. The Turkish lira has been hammered for around 1.5%. The Hungarian forint and Mexican peso lead the advancer. Gold initially fell to two-month lows near $1932 but has rebounded as the dollar and interest rates have come off. It is probing the $1950 area. July WTI is posting an outside down session. It is off around 2.1% today to test the $71 area. Last week's low was closer to $70.65....
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