From Marc Chandler of Bannockburn Global Forex:
Overview: Despite the US jobs report, which was considerably better than the fears induced by the ADP estimate and the gradually rising jobless claims, and apparent resumption of China's rare earth exports to US (and European) auto makers, Asia and European participants sold into the dollar's gains they inherited. The greenback has largely unwound its pre-weekend gains. The US-China trade talks are being held in London today. China's export control of critical metals and magnets was a shot across the bow. As the US dominates chip technology, and therefore the supply chain, China demonstrated it does the same more or less in the rare earths space. Separately, China reported slower exports last month and a decline in exports to the US, but a larger trade surplus overall. Japan had previously reported Q1 GDP contracted but upward revisions to consumption and inventories despite a downward adjusted to business investment, saw the economy stagnate rather than shrink. The dollar is weaker against the G10 currencies and most emerging market currencies.
Asia Pacific equities rallied today, led by more than 1% gains in Hong Kong, the mainland shares that trade there, and South Korea's Kospi. Note that Australian markets were closed for the King's Birthday. Europe's Stoxx 600 is snapping a four-day advance, and US index futures are little changed. European 10-year yields are 4-5 bp lower and the 10-year US Treasury yield is around 2-3 basis points lower near 4.48%. It has risen 11 bp before the weekend. Gold fell 1.25% before the weekend and extended its losses today to around $3293 before recovering to around $3328 before consolidating in Europe. July WTI edged a bit closer to $65 to reach two-month high. It was sold to around $64.20 before finding a new bid in Europe....
....MUCH MORE, including some thoughts on this week's U.S. CPI print.
