From Marc to Market:
Overview: The dollar has steadied today after yesterday's jump. Asia and Europe do not seem to be as enthusiastic about the dollar as North America seemed to be yesterday. President Trump indicated that sectoral tariffs on semiconductor chips and pharmaceuticals could be announced as early as August 1. He also said that there will be more bilateral deals announced. The greenback is mostly a little softer against the G10 currencies, with the Scandis the notable exception, unable to find much traction. Emerging market currencies are softer except for central Europe, the Chinese yuan, and the Mexican peso. The PBOC set the dollar's reference rate higher today for the third consecutive session for the first time in two months.
Equities are under pressure. Nearly the all the large bourses in the Asia Pacific region but Taiwan, India, and Singapore slipped. Europe's Stoxx 600 is weaker for the fourth consecutive session, and US index futures are nursing small losses. Japanese 30- and 40-year bond yields pulled back after yesterday's jump and were off around 10 bp. Most European benchmark 10-year yields are slightly softer. The 10-year Gilt is a notable exception and is a couple basis points higher after the unexpected rise in June CPI. The 10-year US Treasury yield is almost a basis point lower near 4.47%. Gold is trying to end a two-day $31 slide. It is up by around $17 now to $3341. August WTI extended its pullback that began after Monday's high ($69.65) and fell to a seven-day low to approach $66.
USD: The Dollar Index extended its advance and yesterday's 0.6% gain was the most in nearly a month. DXY has not fallen since July 2. Again, greenback's gains were buttressed by higher US interest rates and the implied year-end rate in the Fed funds futures market is up against its highest level since February....
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