From Marc to Market:
Overview: The divergence reflected in the flash PMI readings seen yesterday underpinned the dollar, which is firmer in mostly quiet turnover. The initial Australian dollar gains scored in response to the slightly less decline in Q3 CPI have been unwound. The greenback also remains within striking distance of JPY150 where there are still some large options and some apprehension over possible BOJ intervention. Hungary's larger than expected rate cut yesterday keeps the forint under pressure today, but most emerging market currencies are softer. The Canadian dollar is near the month's low ahead of the Bank of Canada meeting. It is widely expected to leave the policy rate steady at 5.0%.
China's stimulative measures helped lift mainland shares and those that trade in Hong Kong, but the early gains were not sustained. Among the other large markets in the region, Japan and Taiwan also rose. Europe's Stoxx 600 snapped a five-day losing streak yesterday, but it is giving back those gains today. Mixed US earnings after the close yesterday has weighed on the index futures, pointing to a lower open. Benchmark 10-year yields are firmer, 2-4 bp in Europe and the US. The 10-year US Treasury yield is near 4.86%. Gold is consolidating in a narrow range (~$1968.50-$1977). The stronger dollar and firmer yields would be expected to be a drag, but geopolitics maybe lending support. December WTI is stabilizing after a three-day drop that took it down 5%. It is holding above $83, which it briefly traded below yesterday but is struggling to push back through $84.
Asia Pacific
Despite obvious differences and wariness of each other, Japan and China are dealing with similar macro challenges, including shrinking populations....
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