From Marc Chandler at Bannockburn Global Forex:
Overview: The dollar is mostly consolidating with a softer bias after the disappointing employment report before the weekend. The derivatives market is pricing in about a 10% chance of a 50 bp Fed cut next week, which still seems exaggerated given the likely uptick in headline CPI this week. The Japanese yen is the only G10 currency that is weaker on heels of the resignation of Prime Minister Ishida who saw the surveys that showed a majority of his party wanted a leadership contest this year as a vote of no-confidence. The policy uncertainty weighed on the long-end of the Japanese interest rate, though the 10-year yield slipped and equities rose. Most emerging market currencies are also firmer against the dollar, including the Chinese yuan, where the PBOC set a new low fix for the dollar since last November.
The focus is on the French confidence vote today, but French 10-year premium over Germany is a little narrower today. European benchmark yields are little changed, but the UK 10-year Gilt yield is up one basis point, the most in Europe. The 10-year Treasury yield fell over eight basis points at the end of last week, and its three-day drop was near 18 bp. It is trading a basis point higher today to almost 4.09%. Stocks are rallying today. All the large bourses in the Asia Pacific region rose but Australia. Europe's Stoxx 600 is recouping its pre-weekend loss and is up around 0.25%. US index futures are also trading with a firmer bias. Gold is extending its run to record highs and poked above $3617 today. OPEC+ agreed to raise production by 137k barrels a day next month, but actual output is thought to likely be lower as some members may forgo their increase to make up for overproduction previously or may lack spare capacity. Its three-day swoon of more than $3.5 a barrel is being snapped today as the black gold pushes above $63 after settling below $62 before the weekend....
....MUCH MORE
