China Selloff Continues, US Consolidates Gains

China-sensitive markets continued their retreat overnight and into this morning. Shanghai fell 6.6% while Hong Kong fell another 1.4%. Copper remains under pressure falling another 1.0%. Crude Oil was soft overnight but has been bouncing back this morning. In addition to China, energy prices continue to be impacted by forces outside of demand including the ongoing conflict in the Middle East.

The US Dollar is strengthening again, gaining 0.2%-0.4% against majors like the Euro and Loonie, and cryptocurrencies like Bitcoin. Gold is up 0.2% so far today. With the Reserve Bank of New Zealand cutting its benchmark rate by 0.50% overnight as expected, recent Fed commentary and economic data suggests that the US central bank may not be as dovish as some of its peers. In addition to boosting the US Dollar, this sentiment is holding the US 10-year treasury note yield above 4.00%.

Coming off of yesterday’s resilience rally that saw the Dow Industrials gain 0.3% and the NASDAQ soar 1.4%, and ahead of tomorrow’s US Consumer Price Index report, US index futures are consolidating their recent gains, trading flat to down 0.2%. European markets are positive with the Dax, FTSE and CAC all up about 0.3%.

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