From Marc to Market:
SNB Surprises the Market (Again)
Overview: The US dollar is trading higher against all the G10 currencies today but the Norwegian krone. Norway's central bank left policy on hold and warned that if the economy performs as expected, it does not anticipate a rate cut until next year. On the other hand, the Swiss National Bank surprised many with its second consecutive rate cut. The Swiss franc is the weakest of the major currencies, off about 0.70% against the dollar. The Bank of England is up next. It will not cut rates, but a close vote could weaken sterling, which is trading slightly heavier. Emerging market currencies are mostly weaker. The PBOC set the dollar's reference rate at the strongest level since last November and the offshore yuan has fallen to new lows for the year. The Mexican peso is one of the exceptions among emerging market currencies today and is slightly better than steady.
Equities are mixed today. In the Asia Pacific session, Japan, Hong Kong, and Chinese markets fell, but most of the other large bourses were higher. Europe's Stoxx 600 is recouping yesterday's nearly 0.2% loss in full and is advancing for the third session this week. US index futures point to a higher opening led by the NASDAQ. Benchmark 10-year rates are firm today. European yields are up most 2-3 bp and core-peripheral spreads are slightly narrower. The US 10-year yield is up about 2.5 bp to 4.25%. Gold is trading with a firmer basis, but after reaching a nine-day high near $2345 has pulled back and found support near $2332.August WTI busted through the $80 level yesterday that has capped it since the end of April. Its gains were extended to about $81.15 before the buying dried up and it slipped back to around $80.50....
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