From Marc to Market:
Overview: There has been some follow-through activity after Fed Chair Powell's pre-weekend Jackson Hole comments, which confirmed the likely tapering ahead of year-end while underscoring the distinction between taking one's foot off the accelerator gradually and stepping on the brake. The record closes in US benchmarks helped lift Asia Pacific equities today. The MSCI Asia Pacific Index rose 3.3% last week, the most in six months, and extended those gains today with several markets, including the Topix, Taiex, and benchmarks from India, Thailand, and Indonesia, rising more than 1%. European shares are edging higher, and the Dow Jones Stoxx 600 has risen for five of the past six weeks. US futures indices are posting small gains. The US 10-year yield is hovering around 1.30%, while European yields are slightly firmer. The dollar is mixed. Norway and Canada are trading a little higher while the other dollar-bloc currencies and the Swedish krona are softer. Disappointing Swiss confidence survey and signs that the SNB did not intervene last week (sight deposits little changed) is weighing on the franc against the dollar and euro. The JP Morgan Emerging Market Currency Index extended last week's 1.4% gain, its most in three months. Gold poked through $1823 briefly before succumbing to selling pressure. Initial support may be seen near $1810. The Category 4 storm that has shut Gulf drilling and refining activity in the US sent crude higher initially, and the October contract reached almost $69.65 before reversing lower. Support may be in the $67.50. Iron ore in China continued to recover. It rose for the sixth consecutive session. It added 2.5% to last week's 8.4% advance. Copper rallied 4.4% last week and is up around 0.8% near midday in Europe.
Asia Pacific
Japan's July retail sales were stronger than expected. The 1.1% rise was nearly three times more than expected and comes on the back of the 3.1% gain in June. However, the data due in the next few days will serve to keep any optimism in check. Tomorrow, employment and industrial output reports will likely show more economic weakness, and the final August PMI will confirm sub-50 composite reading. The BOJ does not meet until late in September but is expected to downgrade its economic assessment in the wake of the extension of the formal state of emergency that covers more than 70% of the population.
China's PMI reports are out tomorrow, and the world's second-largest economy is expected to have slowed further. Beijing's offensive extended to reining how businesses advertise financial services to households (consumer protection) and threatens to punish those who republish foreign commentary on domestic financial topics without taking a stance. It appears to also be tightening online game service rules for minors, limiting access to one hour a day for teenagers on Friday, Saturday, and Sunday....
....MUCH MORE
Context: Mr. Chandler's Sunday post was "Powell Sent the Dollar Lower. Will the August Jobs Data Bring it Back?"
