From Marc to Market:
Overview: The bout of profit-taking on long dollar positions begun last week has carried into the start of this week. Despite the escalating rhetoric, the yen is not participating today and is trading within the pre-weekend ranges. The greenback’s lows have been set in the European morning and have stretched the intraday momentum indicators, suggesting that North American dealers may not follow suit. The uncertainty about the Swedish election outcome has not prevent the krona from leading the major currencies higher with a nearly 1.6% gain. Emerging market currencies are also mostly higher, led by the central European currencies and the South African rand. China, Hong Kong, and South Korean markets are on holiday, but the other equity markets in the region rallied. Europe’s Stoxx 600 is up nearly 1%. It is the third consecutive advancing session, and it has approached the 20-day moving average. After gapping higher before the weekend, the S&P 500 and NASDAQ may gap higher again. The 10-year US Treasury yield is slightly below 3.3%, while European benchmark yields are mostly 1-3 bp softer. Sweden is the outlier here with a small gain.
Gold is firm on the back of the weaker US dollar but is running into offers in front of $1730. December WTI is extending the recovery that began last week, perhaps encouraged by several European countries confirming doubts about Iran’s commitment to re-enter the nuclear deal. US natgas is 1.4% firmer and is rising for the third consecutive session. Europe’s natgas benchmark eased almost 2% last week and has begun the new week off 5.7% and is below 200 euros for the first time in a month. Iron ore settled softer after rallying more than 6% over the past two sessions. December copper is extending last week’s 4.5% rally with a 1.2% gain today. December wheat is edging higher ahead of the US Department of Agriculture report....
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