From Marc to Market:
Overview: Turn Around Tuesday began yesterday. The dollar pared early gains in North America yesterday and follow through selling today has given it a softer profile against most of the G10 and emerging market currencies. The downticks look corrective in nature, but a great deal of news has been discounted, and after a flurry of activity, the derivatives market is settling on October as the timeframe of the next Fed cut ahead of today's US PPI and tomorrow's CPI reports. Meanwhile, some press accounts reports suggest that US tariffs could be implemented in stages were seen to be a step away from the "10-20% tariffs" but the stages, which could involve more than doubling the average US non-China tariffs are only "moderate" is some abstract sense.
The S&P 500 recovered after the gap from the day after the election was filled yesterday. This has lent support to equity trading today. All the large bourses in Asia Pacific rallied today but Japan. China's CSI 300 was up 2.6% to turn positive now for the year. Europe's Stoxx 600 is about 0.5% higher near midday to recoup most of yesterday's losses. US index futures are up 0.4%-0.7%. Benchmark 10-year yields are mostly softer in Europe, including in the UK. The 10-year Gilts yield is a basis point lower. It is threatening to end a six-day 28-basis point increase. The 10-year US Treasury yield is virtually flat near 4.77%. Gold has steadied after falling 1% yesterday, its first decline in five sessions. February WTI peaked yesterday near $79.25 and is consolidating above $78 today. Last week's high was about $77.85.
USD: The pendulum of market sentiment may have peaked yesterday when the derivatives market did not have the next Fed cut fully priced in until around mid-2026....
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