From Marc Chandler at Bannockburn Global Forex:
Overview: The US dollar is slightly firmer against most of the G10 currencies, with the Antipodeans, leading the move with around 0.25% losses. Rising tensions between Japan and China, coupled with shift in expectations away from a Fed cut and a BOJ hike next month keeps the dollar within strike distance of JPY155, where $1.4 bln in options expire today. The euro is straddling the $1.16 area, where options for around 485 mln euros expire. The nearly flat performance of the Swedish krona and Canadian dollar put them atop the G10 performers heading into the North American session. Emerging market currencies are also mostly softer today, including the Chinese yuan, despite the PBOC setting the dollar's fix at a new low for the year today.
Equities ae mixed. In the Asia Pacific region, Japan, China, and Hong Kong markets fell, while the other large bourses advanced, led by a nearly 2% gain in South Korea. Europe's Stoxx 600 is off for the third consecutive session, while the S&P and Nasdaq futures are 0.20%-0.45% higher. Japanese bond yields rose with the 10-year yield rising to a new multi-year high near 1.74%. Benchmark 10-year rates are mostly lower in Europe. Fitch upgraded Greece's rating to BBB (from BBB-) late Friday, and the yield is off nearly two basis points today. Moody's review Italy at the end of this week, and an upgrade is possible. The 10-year US Treasury yield is 2-3 bp softer, near 4.12%. After falling 2% before the weekend, gold is consolidating in a roughly $4050-$4105 range. December WTI is also consolidating today within the pre-weekend range. It tested $58 last Thursday and is struggling to sustain a foothold above $60.
USD: The Dollar Index held the 99.00 level in the last two sessions and, although it settled below the 20-day moving average ahead of the weekend, it settled near session highs. It reached nearly 99.50 today....
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