| Dollar emerges as safe haven, commodities cool and China chipnakers get boost. The dollar is holding gains around the strongest levels in decades as investors flock to the putative safety of the currency amid concerns that the global economy is slowing. Regardless, there is going to be little respite from inflation, according to Michael Burry. The combination of geopolitical turmoil with blue-collar labor shortages will "raise long-term inflation's floor," says the founder of Scion Asset Management. Consumers say a recession is already here. Oil steadied around $100 a barrel, with Goldman Sachs Group Inc. arguing that a plunge driven by fears a recession will hurt demand was overdone. Today's gains were small compared to Brent's decline of more than $10 on Tuesday, its third largest ever in dollar terms. Investors have been pricing in the consequences of a slowdown even as physical crude markets continue to show signs of vigor and the war in Ukraine drags on. Copper dropped as fears of a global economic slowdown piled pressure on industrial metals.  | China chipmakers were one of the few bright spots in the markets Wednesday after Bloomberg News reported that the US is pushing the Netherlands to ban ASML Holding NV from selling to China technology essential in making a large chunk of the world's chips. That, as well as better-than expected earnings, has spurred a rally in chip stocks in China, with investors seeing US restrictions accelerating sales for domestic companies. Some of Wall Street's biggest brokerages have reiterated their bullish calls for Alibaba Group Holding Ltd., suggesting more gains may be in store. Separately, China's Covid Zero strategy is being tested anew after a jump in infections across Shanghai raised the specter of another lockdown, while a highly infectious subvariant started spreading in the country for the first time. European stocks gave back over half of their opening gains with the Euro Stoxx 50 up 1.25% as of 5:30 a.m. New York time, having added as much as 2.3% in early trade. Media, retail and tech were the best performing sectors within the Stoxx 600. S&P 500 futures drifted 0.3% lower. Short-dated German bonds outperformed once again; Treasuries and UK bonds were comparatively quiet. FX took a breather after Tuesday's sharp price action, although the dollar, Swiss franc and Japanese yen remained underpinned as equity gains faded. Crude futures traded off Asia's best levels. Bitcoin rose back above $20,000. Today's 2 p.m. release of the June FOMC minutes will provide one of the session highlights. Prior to that, economic data will include the weekly MBA Mortgage Applications release at 7 a.m., the final June Services PMI data at 9:45 a.m. and June's ISM Services Index and the May JOLTS Job Openings at 10 a.m. Elsewhere on the central bank front, the Riksbank's Cecilia Skingsley and BOE's Jon Cunliffe will speak on central bank digital currencies. Fed's John Williams is scheduled to deliver comments at a virtual event on banking culture at 9 a.m. Here's what caught our eye over the past 24 hours. For the past year, the CPI report has superseded Non-Farm Payrolls in terms of significance. Job creation has been fairly predictable for awhile and it's inflation that's captured the attention of the Fed, the White House, the general public, and the market. This Friday is Jobs Day, and it might start to matter again. In a note to clients published yesterday, Citi economists Veronica Clark and Andrew Hollenhorst write: "With markets increasingly focused on risks of a steeper growth slowdown, employment figures will likely be the most important activity data released each month." Concerns about recession are all over the place in the markets right now. We've seen a pretty sharp collapse in commodity prices and the 2-10 spread has inverted. And in fact yields have come down sharply across the curve, indicating a slower-than-expected pace of hikes. Inflation breakevens are tumbling. However, by and large measures of economic activity have not been that bad. We've had solid job growth all year. There's good reason to be hopeful that inflation has peaked. One is the aforementioned commodity collapse. We also know about the goods glut, and the decline in shipping and trucking prices. Plus we've seen substantial monetary and fiscal tightening. So the pieces are all there. The question though is whether we can get cooling prices without slamming the labor market (i.e. the dream soft landing scenario). We know initial jobless claims have started ticking up, though it has not been a rapid rise. And continuing claims have remained extremely low. For Friday, economists are expecting are expecting 265k jobs created in June, with the unemployment rate holding steady at 3.6%. We'll see if there are signs of a bigger slowdown materializing. Either way, now that recession fears are so front and center, it's a top shelf indicator again. Follow Bloomberg's Joe Weisenthal on Twitter @TheStalwart | 
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