From Marc Chandler at Bannockburn Global Forex:
Overview: The markets have not sustained the powerful reaction seen yesterday after the Fed hike. Japan and South Korean markets were closed, but many bourses including Taiwan, Australia, and India rose. Europe's Stoxx 600 rallied more than 1% and closed the gap created by Monday's sharply lower opening. US futures are 0.5%-0.7% lower. The NASDAQ may end its three-day rally that lifted it around 5%. The US 10-year yield is firm near 2.95%, while European benchmark yields have also firmed. The US dollar, which was sold hard yesterday has returned better bid today. The Australian dollar and Norwegian krone are off the most (~0.6%). The Canadian dollar is the most resilient among the major currencies. Emerging market currencies are mostly lower, except for handful of Asian currencies.
Gold set new high for the week above $1900. June WTI is firm ahead of the outcome of OPEC's meeting. US natgas is up for the fifth session and is at new highs. Europe's benchmark is off around 1% after surging nearly 7.5% yesterday. Iron ore jumped 2% to snap a three-day slide. Copper is up for a third day but is still below the high set on Monday. Reports suggesting India may limit grain exports has seen July wheat jump almost 2.5% after a 2.7% gain yesterday.
Asia PacificChina's markets re-opened after the long holiday, and the Caixin services and composite PMI were poorer than expected. The service component fell to 36.2 from 42.0, well below the 50 boom/bust level. The composite sank to 37.2 from 43.9. The news will add further pressure on Beijing to provide new support for the economy. At the same time, although the Shanghai and Shenzhen composites posted modest gains (~0.65%), the CSI 300 slipped. The yuan also traded heavily....
