The Greenback Is Finishing The Week With A Firm Tone

Overview: The US dollar is firm against most of the major and emerging market currencies today. Among the majors, the Japanese yen and Swiss franc are resilient. For the week, sterling and the yen appear poised to eke out small gains, while the Scandi's are the weakest performers with around a 1% decline. The freely accessible emerging market currencies, like the South African rand, Turkish lira, and Mexican peso, are leading emerging market currencies lows. Still, the JP Morgan Emerging Market Currency Index is holding on to a modest gain for the week, which, if sustained, will snap a three-week decline. Global equities are under pressure today. In the Asia Pacific region, South Korea's Kospi fell 2% to lead the regional decline, but the MSCI Asia Pacific Index appears to have held on to a small gain for the week. It has fallen in only one week since the end of October. The 0.4% loss of the Dow Jones Stoxx 600 today is unwinding the week's earlier gains and is threatening to end the four-week advance. US shares are trading with a lower bias as well, and the S&P 500 is starting the session with a 0.75% loss for the week. Note that the Russell 2000 is up about 3% for the week coming into today, and it too has fallen in only one week since the US election. Benchmark 10-year yields are mixed. The 10-year US Treasury yield is near 1.10%, a three basis point decline on the week. Core European bonds have edged higher, but in the periphery, including Italy, the yields are softer. Italy's yield is paring this week's yield rise to five basis points from around 10. Gold has recovered off the $1817.50 low at the start of the week and appears capped around $1864. Oil is paring this week's gain that lifted it to a 10-month high. February WTI began the week near $52.25 and rallied to nearly $54 before stalling.  

Asia Pacific

With less than a week left, the Trump administration is pressing forward with more sanctions on Chinese companies. Nine more companies have been blacklisted due to ties with the military, including Xiaomi, a cellphone maker, and Comac, an airplane manufacturer. The deep-water oil company CNOOC has been added to the entity list, which bans sales without pre-approval.On the other hand, the administration has chosen not to impose retaliatory levies on Europe to the digital services taxes. Given the timing, could these steps have been done with the approval of the transition team?  

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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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