Commodities Ease Though Oil Remains Firm

Overview: The new record high in the S&P 500 and the NASDAQ's sixth gain in seven sessions may have helped lift Asia Pacific markets today. Only China and Hong Kong did not participate.MSCI's regional index rose for its fourth consecutive session. Europe's Dow Jones Stoxx 600 is moving higher for the eighth session in a row. Since May 19, it has only fallen twice.US future indices are firm. Benchmark 10-year yields are soft. The US yield briefly rose above 1.50% yesterday, but it was not sustained, and it is holding just below there now. The US dollar is narrowly mixed against the majors. The dollar-bloc is nursing small losses, while most European currencies are posting small gains in quiet turnover. Among emerging market currencies, Asian currencies are underperforming a little, while European currencies, the Mexican peso, and South African rand have a firmer bias. The Turkish lira is off the most today, easing around 1% after falling almost 0.9% yesterday, despite a smaller than expected current account deficit. Unable to resolve the dispute at NATO, Erdogan seemed defiant. The JP Morgan Emerging Market Currency Index is lower for a third session. If sustained, it would match the longest decline in three months. Commodities are drawing attention. Despite July WTI hovering around $71 a barrel, other commodities are weaker. Copper is off around 3.6%, which could be the biggest decline since March. Lumber fell almost 6% yesterday after falling 5.6% before the weekend. It was the eighth consecutive decline. In fact, lumber prices have risen once since May 21. Corn and wheat are trading lower. After paring losses yesterday, gold trading softly around $1864.  

Asia Pacific

Japan's vaccination program is accelerating, and the formal state of emergencies covering Tokyo and several other prefectures is due to be lifted on June 20. However, there is talk of retaining some social restrictions ahead of the Olympics (July 23 Open Ceremonies). Japan's economy remains weak, and this is reflected in today's April report of the tertiary sector, which contracted by 0.7%, a little more than expected. Tomorrow Japan reports May's trade balance. Seasonally, it is a weak month. Japan's trade balance has deteriorated in May - 18 of the past 20 years. On the other hand, the balance improves in June -19 of the past 20 years. The BOJ meets later in the week, and besides updated its economic projections, is not expected to do anything. 

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Read more by Marc on his site Marc to Market.

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