From Marc to Market:
Overview: The dollar is mostly lower, led by the Swiss franc and euro. However, despite softer US rates and a victory for the LDP in local Japanese elections, the yen is trading with a softer bias. Japanese stocks recovered from the pre-weekend profit-taking seen after the Nikkei make new highs for the year. Most other large bourses in the region except Taiwan and India also moved lower. Note that China's CSI 300 fell for the fourth consecutive session and the first back-to-back loss of more than 1% of the year. Europe's Stoxx 600 is flat. It rose last week for fifth consecutive weekly advance. US futures are trading with a lower bias.
European benchmark yields are slightly softer, while the US 10-year Treasury yield is off a little more than 3 bp to slip below 3.54%. European two-year yields are mostly 1-2 bp higher, while two-year US Treasury yield is off 3 bp to 4.15%. Recall that last week, the US 2-year yield reached 4.28%, the highest level since mid-March. Gold is little changed around $1984. It peaked near $2049 on April 13 and tested support in the $1970 area last week. June WTI initially extended last week's 5.5% drop that snapped a four-week rally. It recorded a low today of almost $76.70. The high before OPEC+ output cut announcement at the start of April was near $75.85, which is the bottom of the gap. A move above $78.40 lifts the technical tone....*****
.... America
The key question remains: how much of the Fed's work is being done by the tightening of lending? Initially, economists, rushed to judgment in our view, claiming it was worth 50-75 bp....
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