After yesterday’s torrid rally, which sent stocks higher the most in 2 months on the back of Lael Brainard surprisingly dovish comments, we have seen an unexpected profit-taking session overnight – maybe the market’s concern about a September rate hike is back – with US equity futures down 0.6%, driven largely by a renewed drop in oil prices which slid after the IEA said a surplus in global markets will last longer than initially estimated,persisting well into 2017 as reported previously. As Bloomberg observes, investors remain wary of riskier assets even after dovish comments on Monday from Federal Reserve Governor Lael Brainard damped expectations for a U.S. interest-rate increase next week. The Fed and the Bank of Japan have policy decisions on Sept. 21, with the latter weighing the case for more stimulus.

The oil drop dragged  down currencies of commodity-producing nations, while a flat USDJPY meant that the Nikkei was unable to capitalize on yesterday’s US surge. In China, the Composite was unchanged after stronger than expected industrial production and retail sales data, together with the PBOC unveiling a 28-day repo, doused expectations of a near-term monetary stimulus.

“The lack of U.S. data and the start of the Fed blackout period need not stand in the way of further risk underperformance and outperformance against commodity and high-yielding currencies,” said Valentin Marinov, head of Group-of-10 currency strategy at Credit Agricole SA’s corporate and investment-banking unit in London. The dollar’s reliance after the Brainard speech “suggests that other factors may be at play that could keep the dollar supported especially against commodity and risk-correlated currencies,” he said.

Given the moves over the last few days, it’s worth taking stock of where markets are this morning relative to the closing levels last Wednesday. Most notable perhaps is the fact that the September implied probability for a rate hike is now unchanged in that time frame at 22%. December odds have crept up from 52% to 57%. In terms of US Treasuries, the 10y yield is up 11bps, while 2y yields are a much more modest 2bps higher. 30y yields are also 14bps higher so we have seen a reasonable steepening across the curve. At the other end of the risk spectrum, the S&P 500 and Dow are -1.24% and – 1.09% in the time, while CDX IG is just 2bps wider. In the commodity complex Gold is -1.20% and WTI Oil is +1.10%. So all in all, notwithstanding a reasonable steepening in the yield curve, overall moves have been relatively contained in general.

“Markets are really struggling to read the runes of Fed statements,” said Andrew Parry, London-based head of equities at Hermes Fund Managers Ltd. “Only last week they were talking about the need to have an early rate rise. They are still very nervous about the process of normalization,” he said in a Bloomberg TV interview.

European stocks were little changed as investors assessed a selloff that sent equities to their lowest level in almost three weeks. Partners Group Holding AG led financial-services shares to the biggest gains among industry groups, up 10 percent after posting a jump in first-half earnings. Energy producers fell the most, tracking declines in crude. Ocado Group Plc plunged 14 percent after the online grocer said it sees no respite from sustained margin pressure in the short term. Health-care companies, traditionally viewed as stocks with greater payouts, contributed the most to Stoxx 600 gains today. A Morgan Stanley index tracking companies with high and sustainable dividends is faring its worst versus the broader European gauge since at least January 2013 amid an uptick in bond yields and a shift into so-called cyclical shares. Graham Secker, head of European equity strategy at the bank, says the extent of the rout has made such shares attractive. A gauge of miners fell for a fourth day, the longest losing streak since June. Anglo American Plc and BHP Billiton Ltd. dropped at least 1.2 percent.

The Stoxx Europe 600 Index was largely unchanged, erasing gains of as much as 0.6 percent. The benchmark fell for the past three days as investors fretted central banks may be less willing to use monetary policy to stimulate economic growth. It’s trading near its lowest valuation in more than a month, on an estimated earnings basis.

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