From Marc to Market:
Overview: The softer than expected US CPI drove the dollar and interest rates lower, while igniting strong advances in equities, risk assets, commodities, and gold. Calmer market conditions are prevailing today, and we suspect that in the run-up to the FOMC meeting, a broadly consolidative tone will emerge. The dollar is mostly softer, but within yesterday’s ranges. Only the New Zealand and Canadian dollars among the G10 currencies are softer. Emerging market currencies are generally firmer, led by the recovery of the Hungarian forint on the political deal struck yesterday. The Mexican peso and Turkish lira are the exceptions. Asia Pacific equities generally rose, led by Taiwan and South Korea. Europe’s Stoxx 600 is cutting yesterday’s 1.3% gain nearly in half, while US futures are also a little softer after yesterday’s big run-up. European bonds are selling off and yield are mostly 5-9 bp higher. Sweden’s benchmark has jumped 15 bp after a 1% jump in its CPI. UK Gilts are outperforming, up a single basis point on lower-than-expected CPI figures. The 10-year US Treasury yield is hovering around 3.50%.
Gold is consolidating its nearly $30 an ounce rally seen yesterday on falling yields and a weaker dollar. January WTI is advancing for the third consecutive session after falling every day las week. It is pushing a little above $76. US natgas is snapping a five-day rally and giving back all of yesterday’s 5.3% rally. Europe’s natgas benchmark is off 3.8%. Iron ore eked out a small gain after falling for the past two sessions. March copper is extending yesterday’s 1% gain and is up about 0.5% today. March wheat rallied 2.8% on Monday and fell nearly 0.55% yesterday and is off 1.1% today....
....MUCH MORE
