No, that's not Marc Chandler's headline. I don't think I've seen him use Jackie Wilson song lyrics in the many years he's been on the scene.
From Marc to Market:
Consolidative Session, even if Not Turn Around Tuesday
Overview: The US dollar is trading with a somewhat heavier bias after bouncing higher yesterday. All the G10 currencies are higher, led by the New Zealand dollar, where the central bank is expected to hike first thing tomorrow. Most emerging market currencies are also firmer. Those that are not, like the South Korean won and Mexican peso, are nursing minor losses. The surge in Covid cases weighed on Chinese shares that trade in Hong Kong, while the CSI 300 posted the smallest of gains. Outside of South Korea, most of the other large bourses rose. Europe’s Stoxx 600 is recouping yesterday's small loss to trade near the three-month high set a week ago. US futures are slightly higher. European benchmark 10-year yields are 1-2 bp firmer, while the US 10-year Treasury yield is off almost four basis points to 3.79%.
Gold is snapping a four-day fall and up about 0.5% to $1747. Similarly, January WTI is posting a gain for the first time in five sessions. After falling to about $75.25 yesterday, it reached $81.15 today before steadying around $80.40. US natgas is giving back half of yesterday's 7.5% gain, while the European benchmark is matching yesterday’s nearly 3.5% rise. Surging cases of Covid are weighing re-opening hopes and sending iron ore down 2.5% after yesterday’s 3.3% loss. Iron ore prices rose by 24% over the previous three weeks. March copper is snapping a six-day 8.5% fall. It is up 1.8%. December wheat is trading slightly heavier. It has not closed higher since last Tuesday.Asia PacificThere are a few developments in China to note. First, despite the widespread ideas that Beijing was pivoting on its zero-Covid policy and many investment houses raising their outlook for Chinese equities, estimates suggest that 20% of the world's second largest economy is under restrictions due to the virus, up from around 15.5% a week ago, according to one estimate. Top Chinese health officials insist on sticking with the policy. In downtown Beijing, schools have been shuttered, and people arriving to the capital starting today will be required to take three Covid tests within three days and stay at home until a negative result is produced. Second, the overnight repo rate fell 22 bp to 0.85%, the lowest level since January 2021. The hope of a Covid pivot had spurred a squeeze last week as investors shifted from bonds to stocks. Third, there was a hope that Beijing has also pivoted away from a crackdown on the technology sector. However, Reuters reports that China is set to announce a $1 bln fine on Ant for "disorderly expansion of capital." Fourth, reports suggest that Chinese companies are holding back buying more Russian oil pending the G7 price cap. Russia has reiterated that it will not sell oil to countries that honor the caps, but the price may fall and benefit those who are not formally accepting the cap. Fifth, the tightening of money market conditions lifted the Hong Kong dollar yesterday by the most in three years. The US dollar fell to nearly HKD7.80, the middle of the HKD7.75-HKD7.85 band. Intervention by the Hong Kong Monetary Authority squeezed interbank funding costs. The US dollar recovered today and is near HKD7.8150. One-month forward points, for example, were around -80 earlier this month and were +4.5 yesterday, the most since last 2021. It is nearly zero today....
