From Marc to Market:
Overview: The markets remain on edge. The press reports US President Biden is planning an imminent trip to Israel while Iran warns of "multiple fronts" against Israel if the attacks on Gaza continued. The dollar, which was offered yesterday, is better bid today. Still, the capital markets are relatively quiet. Even the Swiss franc, which was the strongest G10 currency last week (~0.9%) is slightly heavier today. Among emerging market currencies, the Polish zloty continues to be underpinned by the weekend election results. The Mexican peso's 0.45% decline is the most among the emerging market currencies, giving back almost half of yesterday's gains. Gold is firm but within yesterday's ranges and holding below $1933 that was approached at the end of last week.
Asia Pacific and European equities were lifted by the more than 1% rally of the S&P 500 and NASDAQ yesterday. All the large bourses in Asia Pacific but Taiwan rallied earlier today, led by the Nikkei's 1.2% gain. Europe's Stoxx 600 is slightly firmer, constrained perhaps by the modest losses being recorded by the US index futures. The rise in yields seen yesterday is continuing today. The 10-year JGB yield is up nearly three basis points to edged closer to 0.80%. European benchmark yields are mostly 1-2 bp higher, but Italy's 10-year yield is up nearly four basis points amid anxiety over its budget proposals. The 10-year Gilt yield is slightly softer following the weaker-than-expected employment report. The 10-year US Treasury yield is up four basis points to almost 4.75%. December WTI slipped briefly below yesterday's low near $85 but has since recovered back to the opening area near $85.70....
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