Monday 23rd April: Asian markets wary as bond yields reach critical levels

Global Markets:

• Asian Stock Markets : Nikkei down 0.32%, Shanghai Composite down 0.53%, Hang Seng down 0.33%, ASX up 0.37%
• Commodities : Gold at $1336.00 (-0.17%), Silver at $17.09 (-0.45%), WTI Oil at $0.00 (+%), Brent Oil at $68.33 (-0.10%)
• Rates : US 10-year yield at 2.970, UK 10-year yield at 1.490, Germany 10-year yield at 0.602

News & Data:

• (CAD) CPI m/m 0.30% vs 0.40% expected
• (CAD) Core Retail Sales m/m 0.00% vs 0.40% expected
• (CAD) Common CPI y/y 1.90% vs 1.90% previous
• (CAD) Median CPI y/y 2.10% vs 2.10% previous
• (CAD) Retail Sales m/m 0.40% vs 0.40% expected
• (CAD) Trimmed CPI y/y 2.00% vs 2.10% previous
• IMF Blasts New Zealand's "Discriminatory" Ban On Home Sales To Foreigners
• China's War on Pollution Fuels State Takeover of Heavy Industry
• Japan needs 'strong accommodative' monetary policy 'for some time,' says BOJ's Kuroda

CFTC Positioning Data (Week Ending April 17th, 2018)

• EUR long 151K vs 147K long last week.
• GBP long 48K vs 43K long last week.
• JPY long 3K vs 4K short last week.
• CHF short 11K vs 11K short last week.
• CAD short 30K vs 32K long last week.
• AUD short 10k vs 3K short last week. 
• NZD long 27K vs 22K long last week

​Markets Update:

Asian stocks dipped on Monday as investors braced for a bevy of earnings from the world’s largest corporations, while keeping a wary eye on U.S. bond yields as they approach peaks that have triggered market spasms in the past.

Trade remains a discussion point, though selling pressure in Chinese equities has dissipated after developments over the weekend seemed to dial back trade war threats. While the White House is expected to soon unveil its list of Chinese imports it will impose tariffs on, Treasury Secretary Mnuchin indicated an openness to visiting China to discuss trade. China’s Commerce Ministry responded by saying such a visit would be welcomed.

Geopolitics remains a headline focus though has not registered much of a market reaction. Takeaways viewed North Korea’s announcement it would stop nuclear and missile tests as a sign of seriousness about its offer to denuclearize. Trump praised decision, though reports have noted a key sticking point in upcoming negotiations may involve the pace of both sanctions relief and North Korean nuke dismantlement.

ASX outperforming with banks seeing some reprieve. Comes after a recent ramp in political pressure owing to damaging misconduct revelations involving some big name financial firms. Relatively quiet elsewhere, with yen’s latest weakness not offering much upside support for Nikkei. Dollar mostly higher on major crosses, its gains occurring alongside a further lift in 10Y Treasury yield to 2.97%.

Upcoming Events:

Monday, April 23^rd 2018

• 07:00 AM GMT – (EUR) French Flash Manufacturing PMI
• 07:00 AM GMT – (EUR) French Flash Services PMI
• 07:30 AM GMT – (EUR) German Flash Manufacturing PMI
• 07:30 AM GMT – (EUR) German Flash Services PMI
• 08:00 AM GMT – (EUR) Flash Manufacturing PMI
• 08:00 AM GMT – (EUR) Flash Services PMI
• 02:00 PM GMT – (USD) Existing Home Sales
• 07:30 PM GMT – (CAD) BOC Gov Poloz Speaks
• 10:00 PM GMT – (AUD) RBA Assist Gov Kent Speaks

Tuesday, April 24^th 2018  

• 01:30 AM GMT – (AUD) CPI q/q
• 01:30 AM GMT – (AUD) Trimmed Mean CPI q/q
• 08:00 AM GMT – (EUR) German Ifo Business Climate
• 08:30 AM GMT – (GBP) Public Sector Net Borrowing
• 02:00 PM GMT – (USD) CB Consumer Confidence

Wednesday, April 25^th 2018  

• 02:30 PM GMT – (USD) Crude Oil Inventories
• 08:15 PM GMT – (CAD) BOC Gov Poloz Speaks

Thursday, April 26^th 2018  

• 07:00 AM GMT – (EUR) Spanish Unemployment Rate
• 11:45 AM GMT – (EUR) Minimum Bid Rate
• 12:30 PM GMT – (EUR) ECB Press Conference
• 12:30 PM GMT – (USD) Core Durable Goods Orders m/m
• 12:30 PM GMT – (USD) Durable Goods Orders m/m
• 12:30 PM GMT – (USD) Unemployment Claims
• 10:45 PM GMT – (NZD) Trade Balance

Friday, April 27^th 2018

• Tentative – (JPY) BOJ Policy Rate
• Tentative – (JPY) Monetary Policy Statement
• Tentative – (JPY) BOJ Outlook Report
• Tentative – (JPY) BOJ Press Conference
• 07:00 AM GMT – (EUR) Spanish Flash CPI y/y
• 07:00 AM GMT – (EUR) Spanish Flash GDP q/q
• 08:00 AM GMT – (CHF) SNB Chairman Jordan Speaks
• 08:30 AM GMT – (GBP) Prelim GDP q/q
• 12:30 PM GMT – (USD) Advance GDP q/q
• 12:30 PM GMT – (USD) Advance GDP Price Index q/q
• 12:30 PM GMT – (USD) Employment Cost Index q/q
• 02:00 PM GMT – (GBP) BOE Gov Carney Speaks
• 02:00 PM GMT – (USD) Revised UoM Consumer Sentiment
• &more…