From Marc to market:
Overview: As the market reluctantly edges toward the Fed's guidance, the disappointing PMIs from Europe (but also Japan and Australia) helped boost the greenback. The Dollar Index is trading at seven-day highs above 103 after briefly dipping below 102 to set a new low since mid-May yesterday. The unwinding of cross positions is helping the yen hold its own today as it consolidates near its worst level of the year. The surging dollar and risk-off mood has dragged the emerging market complex lower. The JP Morgan Emerging Market Currency Index extended yesterday's loss and its lowest level of the year.
China and Taiwan markets were closed for holiday today, but the other Asia Pacific equity markets are a sea of red. Europe's Stoxx 600 is flat after four days of losses and US equity futures point to tough session for Wall Street. The weak flash PMI readings spurred concerns over growth and ignited a bond rally. European benchmark yields are mostly 10-11 bp lower and the US 10-year Treasury yield is off five basis points to about 3.75%. The lower yields appear to be helping gold stabilize after falling to new three-month lows (~$1910) in early Asia Pacific turnover. It is encountering offers near $1920. Demand concerns again weigh on oil prices. August WTI reversed yesterday from around $72.65 to below $69 and today, fell to almost $68. The month's low was near $67.
Asia Pacific
Japan saw the flash June PMI and May CPI. Japan's manufacturing PMI slipped back below 50 in June after moving above it in May for the first time since last October....
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