From Marc to Market:
A new month begins, but the market dynamics are familiar. Rising oil prices and rising yields have lifted the greenback broadly. The euro and Canadian dollar have been sold to new lows for the year. Interest rate premiums over Germany within the eurozone widen as the focus is on the French and Italian budgets. The combination of the uninspiring Tankan Survey in Japan and record of the recent BOJ meeting saw the market downgrade the chances of a hike this month in Japan. The dollar is above JPY158 for the first time this week.
The dollar’s strength comes despite the futures market reducing the chances of a Fed hike later this month to about 40% from 70% at the beginning of the week. In yesterday’s update the Atlanta Fed GDP tracker estimate for Q3 GDP was cut to 3.7% to 5.0%. Still, the US is seen best able to cope with the shocks. At least seven Federal Reserve officials are expected to speak today. Tomorrow sees Tokyo’s CPI and the US employment report....
....MUCH MORE
