Dollar Stabilizes At Elevated Levels After Surging Yesterday

Overview: The dollar has steadied after surging yesterday and has so far retained the lion's share of its gains, though it remains lower against most major currencies today. The dollar-bloc and Norwegian krone are the best performers while the yen is underperforming. The freely accessible emerging market currencies, including the Russian rouble, Mexican peso, Turkish lira, and South African, are the strongest. The JP Morgan Emerging Market Currency Index is stabilized after falling nearly 1% yesterday. The bond market rally that took the US 10-year yield below 1.35% and the 30-year below 2.0% extended today by a few basis points but have stabilized. European bond yields are also softer, and several countries have seen their yields fall to fresh three-month lows. The MSCI Asia Pacific Index fell for the second session, though Chinese and Australian stocks gain. Europe's Dow Jones Stoxx 600 is recouping yesterday's loss in full, led by the information technology, materials, and energy sectors.US futures indices are posting modest gains after yesterday's slide. Gold is back above $1800. Oil prices reversed yesterday's early gains and tumbled almost 2.4% yesterday. August WTI is firmer today and back toward $75. The US crop report showed deteriorating conditions, especially for soy and wheat. The CRB Index snapped an 11-day rally yesterday with a 2.2% drop.  

Asia Pacific

Chinese officials signaled intentions of cracking down overseas listings. Many Chinese companies have used the "Variable Interest Equity Model" to issue equity offshore. Although Beijing accepted the procedure, it did not endorse it. Over the past decade, PRC-based companies have raised more than $75 billion in such offerings in the US. Meanwhile, the US is seemingly pushing in a similar direction. It has begun insisting that Chinese companies, like other listed companies, must share financial audits with US regulators. If not, they face possible delisting.  

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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