From Marc Chandler at Bannockburn Global Forex:
Overview: The dollar's surge continues. Most G10 currencies are off 0.45%-0.65%. The US dollar is trading above CAD1.40 for the first time since the pandemic, but the Canadian dollar is faring the best of the G10 today (~-0.15%). Since US election, it is the only major currency not to have fallen by at least 2%. All the emerging market currencies are lower today, as well. The greenback is being underpinned by the continued rise in US rates and ideas that trajectory of Fed policy may be tempered by the new administration. The US two-year yield is straddling the 4.30% area. Despite a 25 bp Fed cut last week, the two-year yield is 15 bp above the pre-election rate. The US 10-year yield is edging toward 4.50%. It was below 4.30% last Monday. The Fed funds futures strip imply a 3.82% effective Fed funds rate at the end of next year. That is 20 bp higher than it was last Monday.
The MSCI Asia Pacific Index fell for the fifth consecutive session. Of the large markets, only South Korea, Singapore, and Australia were exceptions. However, Europe's Stoxx 600 is up a little more than 0.5% after retreating in the past two sessions. US index futures are steady to slightly higher. European bonds are mixed. Greek, Spanish, and Italian yields are softer while the others are a little firmer. The 10-year UK Gilt yield is up nearly three basis points as it builds a foothold above 4.5%. Gold's sell-off continues. It is off for the fifth consecutive session and is off $160 over the run. It reached a three-month low near $2537. The yellow metal consolidated around $2500 from mid-August through mid-September. January WTI is trading quietly in a narrow range (~$67.75-$68.45).........America
Producer price inflation is likely to tick up, but the importance of today's report is not so much about producer inflation. This may become more of an issue if/when producer price increases surpass the CPI. The importance of today's PPI is the implication for the personal consumption deflator....
....MUCH MORE
