Wall Street on the Fed: "Nervous, Jittery, Out of Sorts"
From Marc to Market:
Overview: Risk-appetites appear to have stabilized for the moment. Most equity markets are higher. Japan and Malaysia were exceptions, but the MSCI Asia Pacific Index rose for the first time this week. In Europe, the Dow Jones Stoxx 600 is recouping about a third of yesterday's loss. The S&P 500 gapped lower yesterday, and although US shares are firmer, that gap (~2785.5=2820.4) is the key to the near-term outlook, Core yields are a little higher, and the US 10-year is around 58 bp. Italian bonds are little changed, but Spanish and Portuguese yields are more 7-8 bp higher. The US dollar is lower against the major currencies, with the dollar bloc outperforming and the euro complex is little changed. For the first time in three sessions, JP Morgan's Emerging Market Currency Index is posting small gains. Gold, which had tested the $1660 area is back knocking on $1700. June WTI was sold when it poked above $14 and is now around $10. June Brent reached $16 a barrel, its lowest since the late 1990s, and is now a little below $19.....MUCH MORE
Asia Pacific
Singapore, which had done well in the early phases of the pandemic, has seen a reversal of fortunes. It now has the most case in Southeast Asia, according to reports. Foreign worker dormitories apparently have been a crucial center of the outbreaks.
Preliminary March retail sales data from Australia saw a surge in hygiene products and dried food as households prepared to be homebound. Sales appeared to peak in mid-March as the lockdown began. The strong rise in sales (estimated at about 8.2% on the month) should be recognized as a one-off event, and consumption will likely be a drag on Q2 GDP.
There are two developments in Hong Kong to note. First, interest rate differential has seen the Hong Kong dollar trade on the top side of the band, and like yesterday, the Hong Kong Monetary Authority intervened and bought around $360 mln US dollar (selling HKD2.79 bln). It represented a modest increase from Tuesday's operation. Additional intervention is likely in the near-term. Second, HK's Chief Executive Lam announced the most prominent cabinet reshuffle to date, involving five senior officials, including the minister that oversees the relationship with Beijing. The arrests of more than a dozen leaders of the recent protest movement over the past weekend will add to the social tensions....
