From Marc Chandler at Bannockburn Global Forex:
Overview: The dollar's gains have been extended today, but in the risk-off mode, and unwinding of carry positions, the Japanese yen and Swiss franc are firmer. the dollar has stabilized in late European morning turnover. The Bank of Canada is widely expected to cut rates today and the greenback is pushing against CAD1.38, which it has not traded above for three-months. The US dollar gains, which we anticipated, are coming despite interest rates remaining soft. The US 10-year yield is a little lower around 4.23%, it remains within the range set on Monday. A disappointing Eurozone PMI and the risk-off has seen peripheral premiums widen over core rates in Europe. Leaving aside the Russian ruble and the South African rand, most other emerging market currencies, mostly from central Europe and the Mexican peso are leading the decliners.
It is a poor session for equities. Poor earnings are the main trigger. A typhoon led to the closure of Taiwan and Philippine markets, which spared them, at least for the moment, the downdraft, which created a sea of red for the large bourses. Europe's Stoxx 600 is off 0.65%, giving back more than half of the Monday-Tuesday gains, which had snapped a five-day losing streak. US future indices are off sharply, warned of a gap lower opening. Gold is extending yesterday's recovery sightly and reached a three-day high a little below $2420. September WTI stabilized after plunging to $76.40 yesterday, its lowest level in more than a month. Another drop in private US oil inventories (API). If confirmed today, it would be the fourth consecutive draw, the longest streak since last September. Separately, reports suggest that the wildfires in Alberta, Canada are threatening around 10% of the region's oil output....
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