From Marc to Market:
Overview: After recovering impressively yesterday, the US dollar saw some follow-through buying initially but has reversed lower and is paring yesterday's gains against the G10 and most emerging market currencies. East Asian emerging market currencies that had surged have now traded lower for the past three sessions. The main talking point today is tomorrow's trade talk between the US and China. The mutual tariffs are so high that even if they were halved, they would still be prohibitive. China's April trade figures show it was able to more than replace the loss of exports to the US and overall Chinese exports rose. While China has replaced US demand, at least initially, now attention may turn to whether the US can replace Chinese supply. The drying up of container shipments suggests not so quickly. The US economic calendar features nine Federal Reserve officials, but there is little that will be said that would encourage investors to bring forward a rate cut to next month.
Asia Pacific equities are mixed, with China, South Korea, and India among the losers, while Japan, Taiwan and New Zealand, the Philippines, and Pakistan markets rising by at least 1%. Europe's Stoxx 600 is up almost 0.5% and is poised to settle higher on the week. US index futures are firm after yesterday's strong gains. The sharp sell-off in US Treasuries yesterday helped drag yields higher today. In Japan and among the Antipodeans, the 10-year yields rose 4-5 bp, and in Europe, they are up mostly 4-6 bp. The 10-year US Treasury yield is little changed near 4.37%. Gold is trading firmer after falling by $125 in the past two sessions after rallying $190 in the first two sessions of the week. June WTI has fully recovered from the drop to nearly $55 on Monday. It is pushing above the 20-day moving average near $60.80 for the first time in a couple of weeks.
USD: The Dollar Index reached its best level in nearly four weeks yesterday around 100.75 and settled close to the session high....
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