Global Markets:
- Asian stock markets: Nikkei down 1.56%, Shanghai Composite down 0.56%, Hang Seng down 1.07%, ASX down 0.87%
- Commodities: Gold at $1333.20 (-0.54%), Silver at $17.07 (-0.33%), WTI Oil at $64.83 (-0.54 %), Brent Oil at $68.65 (-0.79%)
- Rates: US 10-year yield at 2.714, UK 10-year yield at 1.459, German 10-year yield at 0.685
News & Data:
- (JPY) BOJ Core CPI y/y 0.7% vs 0.5% expected
- (AUD) NAB Business Confidence 11 vs 7 previous
- (JPY) Retail Sales y/y 3.6% vs 2.1% expected
- (JPY) Unemployment Rate 2.8% vs 2.7% expected
- (JPY) Household Spending y/y -0.1% vs 1.6% expected
- (NZD) Trade Balance 640M vs -125M expected
- (USD) Personal Income m/m 0.4% vs 0.3% expected
- (USD) Personal Spending m/m 0.4% vs 0.5% expected
- (USD) Core PCE Price Index m/m 0.2% vs 0.2% expected
- (EUR) German Import Prices m/m 0.3% vs 0.3% expected
- US authorities charge three banks, eight individuals in futures 'spoofing' probe
- Market Euphoria May Turn to Despair If 10-Year Yield Jumps to 3%
Markets Update:
Asian markets mirrored Wall Street’s overnight declines, off record high levels. The greenback has been stabilized, ending six straight weeks of decline against the majors, as US bond yields approach four-year highs. Regional rates have been backing up, adding up to the pressure on the bonds.
Japan has been sending mixed signals, with retail sales beating expectations, but household spending has been shrinking, and jobless rate increasing. However, the stronger yen has been leading to declines in the Nikkei. On the other hand, Chinese markets were relatively immune to the declines, although the PBoC drained CNY240B in liquidity. However, Chinese small caps, especially listed in country’s south, fell sharply, following comments from a regulator about clamping down on high-priced stocks.
Commodities were a mixed bag – with gold falling and copper rising. At the same time, Crude eased slightly. Commodity producers dragged ASX lower while rate backup was blamed for weakness in bond proxies.
The Wall Street declines were mostly an effect of participants considering the backdrop of stretched valuations, sentiments and positioning, not helped by the increasing bond volatility.
German five-year bond yields rose above 0% for the first time since 2015, especially in light of ECB’s messaging that QE is ending soon. A leaked confidential British government report indicated that Brexit will leave the UK economy worse off under every scenario. President Trump’s State of the Union address to look forward to today.
Upcoming Events:
- 06:30 AM GMT – (EUR) French Flash GDP q/q
- 07:00 AM GMT – (CHF) Trade Balance
- 07:45 AM GMT – (EUR) French Consumer Spending m/m
- 08:00 AM GMT – (CHF) KOF Economic Barometer
- 08:00 AM GMT – (EUR) Spanish Flash GDP q/q
- 09:30 AM GMT – (GBP) Net Lending to Individuals m/m
- 09:30 AM GMT – (GBP) M4 Money Supply m/m
- 09:30 AM GMT – (GBP) Mortgage Approvals
- 10:00 AM GMT – (EUR) Prelim Flash GDP q/q
- 02:00 PM GMT – (USD) S&P/CS Composite-20 HPI y/y
- 03:00 PM GMT – (USD) CB Consumer Confidence
- 03:30 PM GMT – (GBP) BOE Gov Carney Speaks
- 11:50 PM GMT – (JPY) BOJ Summary of Opinions
- 11:50 PM GMT – (JPY) Prelim Industrial Production m/m
- Tentative – (EUR) German Prelim CPI m/m
- Tentative – (EUR) Italian 10-y Bond Auction
- &more…
