From Marc to Market:
Overview: The US dollar is trading with a heavier bias today. Equities and bonds have also been sold on the first day of the new month. The dollar bloc and the sterling are laggards today, while the yen has been squeezed higher amid heightened speculation that the Bank of Japan will lift rates later this month. The recovery of the yen does not appear to be spurring an unwinding of carry trades, but the substitution of the yen's funding role with the Swiss franc and/or US dollar. Most emerging market currencies are also firmer but for a few Asian currencies (Taiwan, South Korea, India) and the Russian ruble.
Rising rates and a stronger yen pushed Japanese equity indices down more than 1% today. Taiwan's Taiex also lost 1%. Despite disappointing PMI data, China's mainland markets and shares that trade in Hong Kong rallied, with the CSI 300 up a little more than 1%. Europe's Stoxx 600, which rallied every session last week, is nursing a loss (~0.35) that is unwinding the gains of the past two sessions. The S&P and Nasdaq futures are off 0.55%-0.65%. Bond markets have found no comfort in the equity market losses. European 10-year benchmark yields are up 3-4 bp, while the 10-year US Treasury yield, which slipped below 4% last week, is up three basis points to poke above 4.04%. Gold (and silver) are extending last week's gains. The yellow metal pushed above November's high (November 13, ~$4245) but has retreated after reaching almost $4262.50. January WTI, which traded to almost $57 in the middle of last week, has approached a six-day high near $60 following OPEC+ confirmation that it will pause its increase in output in Q1 26.
USD: The Dollar Index fell every day last week for the first time since April and is trading with a heavier bias today. It has taken out last week's lows (~99.35), and the next support is seen near the November low, slightly below 99.00....
....MUCH MORE