From Marc to Market:
Overview: US stocks and bonds recovered from yesterday's sell-off in Asia and Europe. The Swiss National Bank President Schlegel expressed the views of many Americans when he said on Monday that "There is currently no alternative" to US Treasuries, "and it's not foreseeable that there will be an alternative." The 10- and 30-Treasury yields finished 3-4 basis points lower, stocks closed higher. Yet the tug-of-war continues, and the dollar was sold again in Asia Pacific and Europe today. Among the G10 only the Antipodean currencies are weaker, following Australia's dovish rate cut. Emerging market currencies are mixed. Following the weekend elections, the Romanian leu is the weakest (~-0.75%), while the Polish zloty is the strongest (~0.25%).
After yesterday's US equity recovery, most of the large Asia Pacific bourses rallied. South Korea and India were notable exceptions. Europe's Stoxx 600 managed to settle higher yesterday and is extending those gains today. If it settles higher, it will be the fourth consecutive gain. It has only fallen three times so far this month. US index futures are around 0.20%-0.45% lower. A poor 20-year auction weighed on long-term Japanese bonds, but the 10-year yield rose a little more than one basis point to approach 1.50%. Australia's benchmark 10-year yield tumbled a dozen basis points to around 4.40%. European yields are 1-2 bp lower, while the 10-year US Treasury yield is little changed near 4.45%. Gold is steady, holding above $3200 but below yesterday's high (~$3250). July WTI is little changed near $62.
USD: The Dollar Index set the session low yesterday in early North American turnover a little above 100.00. It trended higher through the remainder of the session and reached 100.50....
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