From Marc Chandler at Bannockburn Global Forex:
Overview:
The dollar is having one of the largest setbacks in recent weeks. We expected the dollar to soften ahead of next week’s CPI, which may fan ideas/hopes of a peak in US price pressures, but the magnitude and speed of the move is surprising, and likely speaks to the extreme positioning. Still, we caution that the intraday momentum indicators are stretched, and the underlying bullish sentiment, may see North American operators take advantage of the dollar’s pullback. More broadly, risk assets are performing well. After a respectable equity performance in the US yesterday, Asia Pacific equities rose, led by Hong Kong, China, and Taiwan. Europe’s Stoxx 600 is up 1.6%, which if sustained, will be the most in a couple of months, and the first weekly gain in four. US futures are trading broadly higher. The 10-eyar US Treasury yield is off 5 bp to around 3.26%.The dollar’s pullback is helping lift commodity prices. Gold reached a new high for the week near $1730. October WTI, which fell $81.20 yesterday, it lows since February, is near $85. US natgas is up 2.25% but is still down 8% for the week. Europe’s natgas benchmark is off 5.3% today and is practically flat on the week. China’s drive to complete unfinished houses has helped lift iron ore prices. They rose 3.7% yesterday and almost 3% today. At $103, it is at a new two-week high. December copper has caught a bid and today’s 2.25% gain puts it up 5.7% on the week after falling 7.7% last week. December wheat is 1.3% firmer and, barring a reversal today, is poised to its third consecutive advancing week.
Asia Pacific
China reported lower than expected inflation and stronger than expected lending figures....
....MUCH MORE
