From Marc to Market:
Overview: The euro is over cent lower from yesterday’s peak, pressured by the drop in the flash PMI composite below 50 for the first time since early last year. More generally, the flash PMIs have shown the global economic momentum is waning, and the bond markets have responded accordingly. The US 10-year yield is flirting with 2.80%, its lowest level in more than two weeks. European yields are 15-20 bp lower and the spread between Italian and German bonds has stabilized. Equities in the Asia Pacific region were mixed. Of the major markets, only China’s CSI 300 finished lower on the week. Europe’s Stoxx 600 is up about 0.5%. If it holds on to these gains, it will be the best week (~3.1%) since March. US futures are softer. Most of the major currencies, led by the euro, are trading lower against the greenback. The Canadian dollar joins the Swiss franc and yen to be the most resilient today. The euro’s weakness is a drag on central European currencies. The South African rand is the strongest among emerging market currencies today, helped by the larger than expected 75 bp hike yesterday.
Gold posted a key upside reversal yesterday and is extending its recovery today. Technically, it looks constructive. September WTI is consolidating at little changed levels. After falling almost 6.9% last week, it is up around 1.8% this week. US natgas has drifted slightly lower after falling nearly 1% yesterday. Still, with the heatwave it is not surprising it is up 12% this week after a 16% gain last week. Europe’s natgas benchmark is up 4% today, which brings the week’s advance to 3.5%. There are fears Russia will cut gas shipments next week. Iron ore surged nearly 6.5%, the most this month. It was up about 0.5% for the week coming into today. September copper has recouped yesterday 0.8% decline. Assuming it does not stage a major reversal today, it will snap a six-week, 28% drop. Wheat prices are off 2.5%, pressed by Turkey, Ukraine, Russia agreement to re-open grain exports....
...MUCH MORE
