From Marc Chandler at Bannockburn Global Forex:
Overview: The US 35% tariff on Canada and President Trump's threat to have a 15%-20% universal tariff rather than 10% provides today's disruption. A tariff letter for the EU is awaited but seeing how the US treated Canada and Brazil (with whom the US has a trade surplus) warns of the risk to Europe. That said, the full details of the tariff threat on Canada, given the free-trade deal, have not been reported yet. The dollar is firmer against the G10 currencies. The backing up of US rates arguably helped push the yen to the bottom of the leaders' board with a 0.5%-0.6% loss. The Canadian dollar is at a new low for the month and is off about 0.35%. The UK economy unexpectedly contracted in May, the second consecutive month. Sterling is off around 0.25%. Most emerging market currencies are lower. The Chinese yuan is a notable exception after the PBOC set the dollar's fix at its lowest level since last November.
Most of the large bourses in the Asia Pacific region advanced. South Korea, Australia, New Zealand, and India were exceptions. Europe's Stoxx 600 is snapping a four-day advance and is nursing a 0.85% loss, which if sustained, would be the largest in nearly a month. US index futures are off 0.5%-0.6%. Benchmark 10-year interest rates are up 2-3 bp in Europe, even UK Gilts, and are mostly 8-10 bp higher on the week. The 10-year Gilt yield is up about 3 bp this week. The 10-year US Treasury yield is up a little more than three basis points today, and around 4.38%, is nearly flat on the week. Gold is higher for the third consecutive session. It stalled near the week's high set Tuesday near $3345. News that Saudi output was greater than expected may be helping keep August WTI pinned near yesterday's low (~$66.45)....
....MUCH MORE
