From Marc Chandler at Bannockburn Global Forex:
Overview: The strong equity market rally seen at the end of last week is carrying into today’s activity. Most of the large markets in Asia Pacific rose by at least 1%. After a 2.6% rally before the weekend, Europe’s Stoxx 600 is up around 0.8%. US futures are around 0.5% after a soft opening. Benchmark 10-year yields jumped 7-11 bp in Europe and peripheral premiums are widening. The 10-year US Treasury yield is around three basis points higher around 3.16%. The US dollar is mostly heavier against the major currencies. Sweden is expected to hike by 50 bp later this week and the Swedish krona is the strongest of the majors today. The Antipodeans are the laggards. News of Russia’s first default on foreign obligations seems largely symbolic and the rouble is trading over 1% higher to lead the emerging market complex.
The South African rand, Mexican peso, and Hungarian forint are recording modest losses. Gold is firm but below the $1850 area. The G7 ban on gold imports from Russia appears largely symbolic as the impact of other sanctions curtail the gold trade. August WTI is in the upper part of its pre-weekend range but holding below $108.50. US natgas is off nearly 2% to trade at its lowest level since early April. Europe’s benchmark, which eased for the first time in two weeks ahead of the weekend is recouping it today. Some optimism in China helped lift iron ore prices by nearly 6% today, which fully recovers last week’s loss. Copper has steadied after falling to early 2021 lows last week. September wheat plummeted 10.5% last week to three-month lows. It opened softer today but has recovered to trade about 1.5% higher....
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