From Marc Chandler at Bannockburn Global Forex:
Overview: The US dollar is broadly firmer, though the Japanese yen is proving a resilient ahead of the BOJ deputy governor's speech tomorrow. Sterling travails persist and it is the weakest of the G10 currencies. The Fed funds futures are no longer fully pricing in a single Fed hike this year. Indeed, the first cut is not completely discounted until mid-2026. Record exports lifted China's trade surplus to a record near $1 trillion last year, waving a red flag in front of the incoming US administration which has promised larger tariffs on Chinese goods. Exports to the US rose to a two-year high in December of nearly $50 bln.
Equities are under pressures. Most of the large markets in the Asia Pacific region lost 1% or more, including the Nikkei, Hang Seng, Taiex, Kospi, Australia, and India. Europe's Stoxx 600 is off around 0.8%, giving back nearly this year's gain. US index futures are broadly lower. The sell-off in US Treasury is pulling global rates higher. European 10-year yields are up 3-7 bp today, with the periphery under pressure. The 10-year yield is nearly three basis point higher around 4.79%. Gold is consolidating softer within the pre-weekend range when it held slightly below $2800. The new US sanctions on Russian oil shipments, amid US inventory draws have helped lift oil prices. February WTI has risen three consecutive weeks coming into today, for a cumulative gain of about 10%. It is up another 1.6% today to straddle the $78 area. It peaked near $80 in April and July last year.USD: The Dollar Index reached nearly 110.00 area the stronger-than-expected jobs data. The gains have been extended to almost 100.20 [sic] today. It has not been higher since November 2022....
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