Markets:
- Gold up $5 to $1916
- US 10-yaer yields down 3.9 bps to 4.2000%
- WTI crude up 38-cents to $80.21
- S&P 500 up 28 points to 4434
- AUD leads, JPY lags
The holiday in the UK on Monday set the tone for the session. There was some dollar buying early in Europe that was quickly reversed and then it was a steady chop sideways to leave the dollar generally lower. The mood was constructive but it had a decidedly late-August long weekend tone as it was choppy and lacked any conviction.
Eyes were on a couple Treasury auctions as possible market movers but both were close to what the market was looking for, despite the huge sizes. We end the day with yields near the lows and that led to some modest selling in the dollar late.
Equities were perky throughout the day after China delivered some stock market stimulus. I’m skeptical of the foundation of the latest rally but it is what it is and it’s easy for risk trades to climb in a low vol summer environment.
Gold and oil both briefly spiked but gave most of it back in choppy trade. That didn’t really spill over into commodity currencies as AUD led but generally on China optimism.