From Marc to Market:
Overview: Equities in Asia extended their recovery and Europe's Stoxx 600 is up for the fourth consecutive session. US futures, are, however, trading lower ahead of the January CPI figure. Benchmark 10-year bond yields are mostly firmer, with the US 10-year hovering around 1.95%. European yields are 2-4 bp higher, and peripheral-core spreads are widening a little. The dovish hold by Sweden's Riksbank has the krona joining the yen as the laggards today, which have seen most major and emerging market currencies edge higher. The JP Morgan Emerging Market Currency Index is posting small gains for the fourth consecutive session. Gold made a new marginal high for the month, but met sellers around $1836, pushing it back toward $1830. The unexpectedly large draw down in US oil stocks (4.75 mln barrels, the biggest decline since last September) had helped March WTI regain the $90 handle after a brief bout of profit-taking. US natural gas prices are steadiest, while Europe's benchmark was a little softer. Copper is up for a second day, while iron ore jumped by more than 5% after yesterday's 1.75% loss snapped a six-day advance.
Asia Pacific
The BOJ moved to defend its Yield Curve Control policy. The yield on the 10-year JGB crept closer to the 0.25% cap as the market tested the central bank's resolve. The BOJ announced it would be an unlimited amount of 10-year bonds on Monday at a fixed rate of 0.25%. Japanese markets are closed for a national holiday tomorrow. It is the first such operation in 3.5 years.
With today's purchases, the Reserve Bank of Australia completed its QE. It holds about 40% of the government's debt or around A$650 bln. Last year, the RBA bought about three-times more bonds than the government issued. Sequentially, the next issue is what to do with the maturing proceeds, and Governor Lowe said a decision will be made in May. The Bloomberg survey finds most economists expect hike in August, while the swaps market sees the hike a little earlier.China's aggregate lending soared to record levels last month of CNY6.17 trillion. Lending in January typically rises in January as new quota are tapped. However, the increase was well more than expected. Bank lending was strong (CNY3.98 trillion), but so was shadow banking activity (the difference between bank lending and aggregate financing). Still, it seems to simply confirm what was already signaled, namely that officials have shifted their stance to support the economy....
....MUCH MORE
