From Marc Chandler at Bannockburn Global Forex:
Overview: After dramatic intraday price swings after the US jobs data and service ISM figures before the weekend, the dollar is consolidating today in mostly narrow ranges. The prospect for a March cut by the Federal Reserve finished last Friday virtually unchanged (73% vs 70%) and is about 66% chance today. There was interest in Dallas Fed's Logan's suggestion that the tapering of QT be discussed, though it seems to simply confirm what many has suspected as the use of the reverse repo facility diminishes. We suggested it could wind down by the middle of the year. Also, over the weekend, a tentative deal to re-authorize the federal government spending to avoid a partial government shutdown beginning January 19 was struck but it is not clear that the congressional votes are there.
Meanwhile, the selling pressure on Chinese stocks that trade in Hong Kong or the mainland continues. The CSI 300 was off 1.3% today to bring this year's decline to about 4.25%. The MSCI Asia Pacific Index was off 2% last week and those losses were extended today. Europe's Stoxx 600 is trading about a quarter-of-a-percent lower to start the week. The temporary grounding of Boeing's Max 9 (171 aircraft, mostly in the US) is weighing on the company's shares and a drag on the index futures today, after small gains before the weekend. European 10-year yields are mostly 2-3 bp firmer while the 10-year US Treasury yield has come back a little softer (~4.03%). Gold is trading heavily and is just holding above the pre-weekend low (~$2024.60). February WTI is trading through its pre-weekend low (~$72.20). The low set in the middle of last week was closer to $71.Asia PacificChina is likely to report its December lending figures in the coming days. It appears that bank loans (new yuan loans) increased but this may have been more than offset by a pullback in shadow banking activity....
