From Marc Chandler at Bannockburn Global Forex:
Overview: The dollar is offered. Neither the 227k rise in nonfarm payrolls, nor the above 3% Q4 growth that the Atlanta Fed sees the economy tracking, or the uptick in November CPI expected to be reported on Wednesday has been sufficient to dampen speculation of a rate cut next week. The futures market has a nearly 88% chance discounted. The antipodean currencies and Scandis are leading the move, ostensibly encouraged by the pro-growth signals from China's Politburo. The yen is the laggard. A speech now planned for mid-January by a deputy governor of the BOJ that could be used to flag a rate hike has seen speculation of a hike next week fade a bit. Emerging market currencies are mixed. The South Korean won is the weakest, following last week's drama, it is off 0.65% today. Central European currencies are mostly firmer along with the Mexican peso and Thai baht.
China's announcement helped local shares recoup some of the earlier losses, but the CSI 300 still settled fractionally lower. The Hang Seng and mainland shares that trade there rose 2.75% and 3.15%, respectively. Korea's Kospi was punched 2.8% lower and the KOSDAQ was rocked for 5.2%. Europe's Stoxx 600 has a seven-day advance in tow coming into today and is up marginally in the morning turnover. US index futures are nursing negligible losses. Benchmark 10-year yields are mixed. They fell in the Asia Pacific region, partly catching up. The 10-year Chinese government bond yield slipped three basis points to a new low near 1.91%. European yields a narrowly mixed. The French and peripheral premiums are slightly narrower. The 10-year US Treasury yield is up a little more than one basis point to approach 4.17%. Gold caught a bid. It is near a seven-day high (~$2656). Syrian developments may have spurred some demand but news that China's central bank bought gold for reserve for the first time in seven months seemed to be the more important trigger. A trendline off the last October and November highs comes in tomorrow a little below $2680. January WTI held above the pre-weekend low (slightly below $67) and has risen back above $68 today.Asia PacificChina kicked off the week with its November inflation gauges...
