From Marc to Market:
Overview: The sharp jump in US long-term interest rates has helped lift the greenback in recent sessions and it remains firm against most of the G10 currencies today. The Canadian dollar is the best performer, and it is nearly flat. The intraday momentum indicators warn that after a mostly consolidative Asia Pacific and European morning, the greenback may probe higher in North America. The US economic calendar features the JOLTS report on job openings, while auto sale will trickle in throughout the day. Headline risk comes from the ECB gathering in Sintra, where Fed Chair Powell will speak later this morning.
Equity markets are mostly lower today, though Japan's Topix made new highs and the Nikkei reached its best level in three months. Most of the other large markets in the region fell. Europe's Stoxx 600 snapped a four-day slide yesterday but is giving it all back plus some today. It is off nearly 0.5%. US index futures are off 0.3-0.5%. European benchmark 10-year yields are 1-3 bp firmer today and France's premium over Germany is slightly wider today. UK Gilts are bucking the move, and the 10-year yield is a couple of basis points lower, aided by moderating BRC shop inflation. The 10-year US Treasury yield that was testing 4.20% early last week is consolidating around 4.45% now. Gold is subdued in the narrow range established at the end of last week (~$2320-$2340). August WTI has extended its rally to $84. It has not closed above there in almost three months. Escalating tensions in the Middle East and the onset of the hurricane season in the Atlantic are cited as the proximate drivers....
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