Capital Markets: "Calmer Markets to Start the New Week"

From Marc Chandler at Bannockburn Global Finance:

Overview: There did not appear to be any negative surprises over the weekend, and this is helping calm investors' nerves at the start of the new week. Deutsche Bank shares have recovered most of the pre-weekend loss in the German market, and Stoxx bank index is posting a gain for the first time in four sessions. The AT1 ETF is slightly softer. In Japan, the Topix bank index slipped around 0.5%, its fourth decline in the past five sessions. Asia Pacific equities were mixed. China, Hong Kong, Taiwan, and South Korean markets fell, while Japan, Australia, and India rose. Europe's Stoxx 600 is up nearly 1% after losing about 1.5% in the previous two sessions. US equity futures are trading with a firmer bias. Benchmark 10-year yields are jumping back. The 10-year US Treasury is seven basis points higher near 3.45%, while European yield are mostly 6-10 bp higher, and the peripheral premium is smaller. 

The US dollar is mostly lower in subdued turnover. The Swiss franc and sterling are leading the G10 currencies higher. The New Zealand dollar, Japanese yen, and Norwegian krone are softer. Emerging market currencies are mixed. The Mexican peso continues to recover from the risk-off losses and after the Russian rouble is the strongest among the emerging market currencies today. The South African rand leads the decliners with a nearly 0.9% pullback. Rising rates has tarnished gold. After briefly trading above $2000 before the weekend it has been sold to about $1853 today and looks poised to test last week's lows near $1935. A push beyond that would weaken the technical outlook. May WTI is trading quietly as it straddles the $70 area.

Asia Pacific

While identifying China as one of the "green shoots" in the world economy, the IMF's Managing Director Georgieva urged Beijing to strengthen consumption. The IMF forecast China to grow by about 5.2% this year, which would account for around a third of the world's growth. Conventional thinking has long criticized China for under-consumption. Georgieva argued that shifting away from investment and toward consumption is more durable, less reliant on debt, and will help address climate change....

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