From Marc Chandler at Bannockburn Global Forex:
Overview: The drama in Russia captured the imaginations but failed to have much impact on the capital markets. Conventional wisdom sees it as a sign of Putin's weakness, but he has been underestimated, including by many Ukrainians who did not think Russia was going to invade despite America's repeated warnings. It may take some time for the implications for the two main protagonists, Wagner head Prigozhin and Defense Minister Shoigu. The war in Ukraine is likely unaffected, and Kyiv's counter-offense thus far seems rather muted. The risk is that the war escalates if Kyiv resorts to medium- and long-range missiles to hit Russian assets in Crimea, and possibly in Russia proper. Meanwhile the record from the Bank of Japan recent meeting showed at least a couple of members were moving toward a change in stance. One wanted to discuss revisions to the yield curve control "at an early stage" and another warned of while inflation may moderate later this year, it may not be fall back under 2%. These comments, coupled with the Vice Finance Minister for International Affairs warning that officials will respond to if moves were excessive.
The sell-off in equities continues. The MSCI Asia Pacific fell for the sixth consecutive session, and so has Europe's Stoxx 600. US equity futures are also trading with a softer profile. Benchmark 10-year yields are mostly 2-4 bp lower in Europe and the US (putting the 10-year US Treasury yield slightly below 3.70%). The yen leads the G10 currencies higher with about a 0.35% gain. The Swedish krona (central bank meets later this week) and the Australian dollar are the chief laggards today. Emerging market currencies are mixed. We note that the Chinese yuan and Russian rouble are trading lower, and the Turkish lira has been tagged for another 2.5%. Lower rates and a softer dollar have given gold a small lift. It traded near $1910 before the weekend, a three-month low, and is near $1930 late in the European morning. August WTI began higher near $70 before easing to almost $68.70. It has steadied near $69.50....
....MUCH MORE
