From Marc to Market:
Overview: There has been little follow-through dollar selling so far today after yesterday’s dramatic downside reversal after the initial flurry of buying in response to the stronger than expected US CPI. Still, the upticks look corrective in nature and the intraday momentum indicators are stretched, raising the prospect of new sales by North American operators today. The sharp recovery in US equities did carry over into Asia and Europe where most bourses are ending the week on a firm tone. Europe’s Stoxx 600 has edged above last week’s closing level. However, US futures are trading a bit heavier. European bonds are rallying, with 10-year yields off mostly 4-9 bp. Gilts are continuing to recover. The 10-year yield is off about 18 bp to bring the week’s decline to more than 45 bp. The 30-year yield is off 17 bp to around 4.36%, which is a 30 bp decline this week. Sterling is the weakest of the major currencies, off around 0.85% (~$1.1265).
Gold remains on the defensive below $1655. It is off about 2.4% this week. December WTI rose every day last week but is falling today for the fourth session this week. Around $87 barrel, it is down around 4.7% this week after surging 16% last week. US natgas surged 4.75% yesterday but is down 1.6% today. It was practically flat on the week coming into today. If the losses are sustained, it will be the eighth consecutive weekly drop. Europe’s benchmark fell 4.3% yesterday and is off 3.6% today. It is off about 5.5% this week, which is seventh weekly fall. It has fallen by more than 50% over this run. Iron ore rose 2.2% today to finish the week unchanged. December copper is slightly firmer and is up about 1.9% this week. December wheat is giving back most of yesterday’s 1.1% gain. On the week, it is up about 0.6% after falling 4.55 last week....
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