From Marc to Market:
Overview: The US dollar is consolidating in a mixed fashion today ahead of the employment report. Given the numerous comments from Fed officials in recent days, it is clear that the bar to a rate cut this month is very high. Next month's report will contain the annual benchmark revisions. Sterling, which has been the center of some of this week's drama has stabilized for the moment. It is still off nearly 1% this week, making it the worst G10 performer. The Canadian dollar is the only G10 currency that has managed to gain against the greenback. It is up about 0.25%, with the US dollar slightly above CAD1.44. Emerging market currencies are mixed, with Asia Pacific currencies outperforming central European currencies. The Chinese yuan is still pinned at the lower end of its band against the dollar. Around the open of the US stock market, following the 5-4 Supreme Court decision yesterday, President-elect Trump faces sentencing in a NY court for the "hush money." The spectacle may attract attention, but the market impact is likely minimal at best.
Equities are trading heavily. The Nikkei, China's CSI 300 and the index of mainland shares that trade in Hong Kong fell more than 1%. Only a handful of smaller equity markets posted minor gains. Europe's Stoxx 600 is slightly lower, as are US equity indices. Benchmark 10-year yields are firmer. Reports suggest the BOJ may boost its inflation forecasts at this month's meeting. European yields are mostly 1-3 bp higher. The 10-year UK Gilts yield is up three basis points to about 4.84%, a little below yesterday's highs. It is up 23 bp this week. Italy's 10-year posted the second biggest rise this week, up about 16 bp. The 10-year US Treasury yield is slightly firmer at 4.70%, putting it up about seven basis points this week. Gold is firmer, extending its advance for the fourth consecutive session. Near $2680, it is at its best level since mid-December. February WTI is surging more than 2% today to a three-month high near $75.80. Falling inventories, winter-cold, and the possibility of more sanctions on Russia and Iran are seen as the drivers today.
USD: The Dollar Index stalled in front of 109.40 for the past two sessions and it has capped it today....
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