From Marc to Market:
Overview: The dollar was better bid yesterday in North America after the better-than-expected JOLTS report, but it has come back offered today. Still, the general tone is one of consolidation. The greenback is a little softer against the most G10 currencies and all but a handful of emerging market currencies. Meanwhile, most of the final May PMI readings have been revised up from the flash weakness after the April US tariff drag. The Bank of Canada may stand pat today after firmer core CPI and Q1 GDP readings, but its easing cycle does not appear over. ECB meets tomorrow and there is little doubt that it will deliver another quarter point cut. A pause is likely as the neutral rate is approached and the past easing still needs to work its way through the economy.
The gains in US equities yesterday are appearing to help lift global equities today. Most Asia Pacific bourses were higher, led by a 2% advance in Taiwan and South Korea. The Stoxx 600 in Europe is up around 0.50%, which if sustained, would be the largest rally since early last week. US index futures are firm (~ 0.10%-0.20%). Benchmark 10-year yields have edged higher. While the 10-year JGB is up a little more than one basis point the 40-year bond yield is up three basis points to a new five-day high (~3.14%). European 10-year rates are mostly 1-3 bp higher. The benchmark US Treasury yield is edging 1-2 bp higher to hover near 4.46%. Gold is trading firmly but within yesterday's range. After reaching almost $63.90 yesterday, July WTI has been confined to about a 50-cent range above $63.05 so far today.
USD: The Dollar Index recovered from a six-week low slightly below 98.60 yesterday seen in the early Asia Pacific activity on Tuesday morning to a session high a little below 99.35. It was recorded shortly after the expected increase in job openings. Other parts of the April JOLTS report were as encouraging....
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