From Marc to Market:
Yen Slumps but Material Intervention Still Seems Unlikely, Sterling Holds $1.31, and PBOC Fix USD at New Low
Overview: The US dollar is mostly consolidating in narrow ranges against the major currencies. The notable exception is the Japanese yen, which has slumped to a new nine-month low as the greenback approached JPY155. Despite repeated warnings by Japan's finance minister, the market seems undaunted. Actual material intervention seems unlikely, especially outside of Tokyo markets. Bearish sentiment toward sterling after yesterday's poor employment data has seen it edge a little closer to $1.3100, where options for GBP1.9 ln expire today. Most emerging market currencies also are softer, though the PBOC set the dollar's reference rate at a new low since last October.
Equities are in rally mode today. The large markets in the Asia Pacific region rallied but China and Australia. Europe's Stoxx 600 is advancing for the third consecutive session and is up more than 3% this week. US index futures are higher, and the spot indices may gap higher at the open. The US Treasury market, which was closed yesterday, is bid today, with the 10-year yield off three basis points, ahead of today's auction, to around 4.08% now, which it has not closed below this month. European yields are mostly a little firmer. The 10-year Gilt is an exception, with a nearly three basis point increase to about 4.42%. Gold is consolidating after stalling in front of $4150 yesterday. A brief dip below $4100 was bought today. December WTI rose more than 2% Monday-Tuesday but is giving about half of it back today and is near $60.50....
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