From Marc to Market:
Overview: The market is on edge. Anxiety is running higher. It is partly geopolitics, and it is partly market stresses. The dollar is holding above JPY150 but so far, no reports or signs of intervention. Bank shares are under pressure. An index of Japanese banks has fallen for five of the past six sessions and are off about 8% from the year's high set last month. An index of European bank shares has fallen in six of the past seven sessions and will likely close at a loss for the fourth consecutive week tomorrow. The index has fallen more than 8.5% since the July high. US bank indices are fallen for the past six sessions and are of 20-23% from August highs. More broadly today, equities are lower. Chinese markets are a notable exception, but many suspect the hand of China's sovereign wealth fund. Most large bourses in the region, including Tokyo, Taiwan, South Korea, and India are all off more than 1%. Europe's Stoxx 600 is 0.8% lower, offsetting the gains of the past two sessions in full. US index futures are trading lower after the S&P 500 and NASDAQ closed their lows yesterday, at levels not seen since early June.
The dollar is trading with a firmer bias, but the dollar-bloc currencies are recovering from earlier losses and are trading a bit higher against the greenback. The Japanese yen is trading at little changed levels but is holding above JPY150. Most emerging market currencies are also trading heavier, but a few freely accessible currencies, including the South African rand, Hungarian forint, and Mexican peso are a little stronger. The Turkish lira is softer ahead of its central bank decision, where a 500 bp hike is expected. The 10-year JGB yield rose to a new high near 0.87% today, but European and US bond yields is slightly softer. The 10-year US Treasury yield is near 4.95%. Gold has recovered from about $1954 on Tuesday to approach $1993.50 today. Last week's high was slightly above $1997. December WTI is straddling the $85-a-barrel level after recovering from almost $82 yesterday.
Asia Pacific
There are two conflicting forces.....
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