From Marc to Market:
Overview: The US dollar enjoys a firmer tone today after falling to new two-month lows against several of the G10 currencies. The market lacks near-term conviction as the US tariff threat looms after next week. US Secretary of State Rubio and Treasury Secretary Bessent have not attended the G20 meetings in South Africa due to tension in the bilateral relationship but adds to sense of US unilateralism, which is often mischaracterized as isolationist. Eurozone and the UK's preliminary PMI disappointed, and British retail sales rebound masks underlying weakness. The dollar has rebounded against the Japanese yen, helped by BOJ Governor Ueda's threat to purchases of JGBs to stabilize the market. The 10-year yield has risen by almost 25 bp over the past month. In contrast, the US 10-year yields is off nine basis points. Even with today's gain, the dollar is off about 1.25% against this week. The euro has been unable to sustain a foothold above $1.05, and near $1.0470 is off about 0.2% on the week.
Equities are trading higher today. Only Australia and India among the large Asia Pacific bourses did not rally. The index of mainland shares that trade in Hong Kong soared by over 4% to reverse the week's decline was the leader. Europe's Stoxx 600 is up about 0.40% after falling for the past two sessions. A close here would mark the ninth consecutive weekly gain. It has not fallen on a weekly basis since before Christmas. US index futures are practically flat now and for the week coming into today. Bonds are also firmer. The 10-year yields in Europe are mostly 2-4 bp lower, though Gilts are unchanged. The 10-year US yield is slipping back below 4.50%. Gold is softer, near $2930, after setting a record of almost $2955 yesterday. April WTI set the week's high yesterday near $73.15 and has been sold below $72 today. The 200-day moving average is near $71.45.
USD: The Dollar Index was sold to new two-month lows yesterday near 106.35, meeting the (38.2%) retracement of the rally from the late September low (~100.15). It has steadied today and has returned to last week's settlement (~106.70). Failure to close about it would record the third consecutive weekly decline....
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