Themes

• General mood is “risk off”
• Focus on the continued rise in U.S. yields
• Empire State Manufacturing Index much weaker than expected

What’s Moving

The story of the day in New York trade overnight was the higher U.S. interest rates, which saw the Dollar broadly firmer across most of the majors. Best Dollar gains were against the Euro, with players noting the widening of the spread on Treasuries against Bunds.

Sterling was also in the doghouse, with profit taking seen on cable after the recent gains.

Oil continued to gain after Goldman Sachs called for oil to hit US$96 by year end.

The Empire State Manufacturing Index (-0.7 from talk of 25.0) was soft, but largely ignored on the day.

Thoughts

Its going to be another consolidation day in Asia today, with offshore markets still struggling with a lack of clear direction and with little on the data calendar locally today.

Expect consolidation of overnight movements.

Pivot Points