From Marc to Market:
Investor Anxiety Continues to Run High even If More Comfortable ECB 50 BP Tomorrow and 25 bp Next Week by the Fed
Overview: The capital markets remain unsettled. Asia-Pacific bourses rose, but European markets are sharply lower, with the Stoxx 600 off 1.3%, giving back the lion's share of yesterday's gains and US equity futures are lower. Benchmark 10-year yields are off 3-9 bp in Europe, with widening core-periphery yields. The yield on the 10-year US Treasury is off a dozen basis points to about 3.56%. Two-year yields are also sharply lower, led by the 15-16 bp decline in Germany and France (Italy's two-year yield off a couple basis points). The two-year US yield is down seven basis points to 4.18%.
The US dollar is firmer against all the G10 currencies but the Japanese yen. The Norwegian krone and euro are under the most pressure, off about 0.5%. After the yen, the Canadian dollar is off the least (~0.20%). Most emerging market currencies are under pressure, and the Mexican peso is bearing the brunt after yesterday's recovery. The peso is off a little more than 1.1%, and the Hungarian forint and South African rand are close behind. Gold is recovering from a pullback to around $1886 and is back above $1900. Demand concerns appear to be weighing on crude oil, and the May WTI contract is pinned near the trough seen yesterday around $71....
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