From Marc to Market:
Overview: Leaving aside the Australian dollar, which is benefiting from the optimism over China's re-opening and a reassessment of the trajectory of monetary policy after a stronger than expected inflation report, the other G10 currencies traded quietly this week and are +/- less than 0.5%. The risk-on honeymoon to start the year remains intact. The MSCI Asia Pacific Index has risen every day this week and index of mainland shares that trade in Hong Kong rose nearly 6.3%. This suggests positive impulses for Chinese stocks when the mainland markets re-open Monday. Europe's Stoxx 600 is up about 0.5% this week. In the US, the S&P 500 closed above the downtrend line from January 2021 and made new highs for the month yesterday. US stock futures are trading with a slightly heavier bias now.
Bond markets are under some pressure today. Benchmark 10-year yields are 5-10 bp higher in Europe and with few exceptions are higher on the week. The 10-year US Treasury yield is up about five basis points near 3.55%, which is slightly below the week's high. Crude oil is firm with the March WTI contract above $82. This month's high is a little higher. It settled near $81.65 last week and, barring a setback, it would be the third consecutive weekly gain and the sixth in the past seven weeks. Meanwhile, the average price of US retail gasoline continues to drift higher and around $3.50 is up about 9.5% so far this year. Yesterday's US GDP figures reduce the chance of surprise from today's personal income and consumption reports, including the deflators. The University of Michigan reports its final January confidence and inflation expectation survey results. The focus is on next week's Fed, ECB, and BOE meetings, and the US jobs report....
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