- • A consolidative tone keeps the US dollar little changed against the major currencies.
- • China’s crackdown on commodities and crypto has sent ripple effects through the respective markets.
- • The European Court of Justice ordered a Polish mine to cease its brown coal mining after complaints about the impact on groundwater levels in the Czech Republic.
- • The G7 agreed to stop funding all overseas coal projects by the end of the year.
- • The UK-Norway’s free-trade agreement is at risk.
- • For the first time since last July, speculators are net short Eurodollar futures contracts.
- • Canadian markets are closed for Victoria Day.
The US dollar is firmer in the European morning after starting out with a softer bias in Asia Pacific turnover. The dollar-bloc currencies, sterling, and the Swiss franc are heavy, but ranges are narrow, and consolidation seems to be the flavor of the day. Central and Eastern European currencies are faring best among emerging markets, but the JP Morgan Emerging Market Currency Index is little changed.
Benchmark 10-year yields are also hovering around unchanged levels in Europe, and the US 10-year yield is flat at 1.62%.
Equity markets are off to a better start. The MSCI Asia Pacific Index and Europe’s Dow Jones Stoxx 600 are trying to extend the advance for the third consecutive session. At the same time, US futures point to recovery after the pre-weekend fall.
China stepped up its warnings about the rise of commodity prices, and iron ore fell for the fourth consecutive session, for a cumulative 15% decline. Steel rebar futures price fell for the sixth session in the past eight for a nearly 19% decline in total. Copper prices are steady after falling more than 4% in the second half of last week.
July WTI recovered before the weekend after falling nearly 7% in the previous three sessions and is up another 1.8% today to resurface above the 20-day moving average (~$64.55).
Gold continues to trade within the range set in the middle of last week (~$1852-$1890).
Bannockburn Global Forex