From Marc to Market:
Overview: The higher-than-expected US CPI and the strong expectation of a 100 bp hike by the Fed in two weeks is propelling the dollar higher. It jumped to almost JPY139.40 and the euro is off more than cent from yesterday's high (though holding above parity). Even where there has been favorable economic news, like the strong jobs report in Australia, is failed to dent the greenback. Most of the large bourses in the Asia Pacific regions advanced. Hong Kong is a notable exception, and the Singapore and Philippines' stocks fell after the surprise tightening moves. Europe's Stoxx 600 is extending yesterday's 1% slide and is off around 0.8% in late morning turnover. The S&P and NASDAQ futures are trading lower. They have fallen in the first three sessions this week. The US 10-year yield is a few basis points higher around 2.96%. European benchmark yields are 8-18 bp higher, with Italian bonds getting hit political concerns. But the peripheral premium more generally is widening.
Gold is returning to its lows after being turned back from around $1750 yesterday. August WTI is traded at its lowest level in three months near $93.40. Higher gasoline prices in the US have seen demand slump to around 8 mln barrels a day last week. In seasonally adjusted terms, it is the lowest since the mid-1990s. After surging 8.5% yesterday, US natgas is off around 1.2% today. Europe’s benchmark is off 2.5% today after rallying 10% in the past two sessions. Iron ore prices collapsed 8% today after rising 3.6% yesterday. September copper is giving back yesterday1% gain plus some. It fell more than 6.5% Monday-Tuesday. Lastly, September wheat is trying to snap a three-day decline. It is near five-month lows....
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