From Marc to Market:
Overview: The dollar is mixed on what will start critical second half of the week. France holds its confidence vote in a few hours. Fed Chair speaks at a moderated discussion at the New York Times around 1:40 ET. The US data focus shifts to the labor market with the ADP estimate today and the nonfarm payroll report on Friday. The head of the main opposition party in Japan stepped down ostensibly until March due to a personal scandal and this has dampened speculation of a BOJ hike later this month. The yen is off 0.75%. Disappointing Australian Q3 GDP prompted the market to bring forward the first cut and took the Aussie down more than 1%. If one excludes the yen and antipodean currencies, the others are +/- 0.1%. The dispersion of changes is more pronounced among emerging market currencies. Of note, the South Korean won has recovered almost half of yesterday's loss amid calmer conditions today.
Equities were mixed in the Asia Pacific region but mostly the large bourses were lower. The won stabilized but the Kospi fell almost 1.5%. Europe's Stoxx 600 is up around 0.25% to extend its rally for the fifth consecutive session. US index futures are firm (0.2%-0.5%). Benchmark 10-year yields are 2-6 bp higher in Europe. The French premium over German has narrowed slightly. The 10-year US Treasury yield is nearly three basis points higher at 4.25%. It is higher for the third consecutive session, which if sustained, matches the longest advance since September. Gold is virtually flat near $2642. January WTI is firm, extending yesterday's recover. It is above $70. Last week's high was near $71.50........Europe
The focus is on the French parliament and whether the current government can survive. It is a crisis but not an existential one. If the government falls, Macron will likely name a new prime minister or allow Barnier to continue in a caretaker role. On the eve of the vote, the French 10-year premium to Germany narrowed and has narrowed a little more today....
....MUCH MORE
