From Marc to Market:
Overview: Equities are recovering from dramatic losses. Today, the Nikkei, Hang Seng, and Kospi surged by more than 2%. The large markets in the region advanced except India. Europe's Stoxx 600 is up about 1.2% near midday after falling 0.75% yesterday. It is nearly flat on the week after falling for the past four weeks. US futures are 1%+ higher. Benchmark 10-year yields are firmer across the board. The 10-year US Treasury yield is slightly below 2.90%, while European yields are 4-8 bp higher and the peripheral premiums are a little wider. The dollar is mixed with the Scandis, Canadian dollar, and Swiss franc posting modest upticks. The euro, sterling, and yen are struggling. Emerging market currencies are mixed with little obvious rhyme or reason geographically. The freely accessible emerging market currencies are also mixed.
Gold extended yesterday's sell-off to test the $1812 area before stabilizing. Now near $1821, gold is off about 3.3% this week. June WTI posted an upside reversal in the middle of the week, after falling to $98.20. It is extending yesterday's gains and testing the $108 area. US natgas is edging higher. It has not fallen since Monday. Europe's benchmark surged 12% yesterday as Russia reduced gas supplies to Germany, but is almost 3% lower today. Iron ore is up about 1.2% to pare this week's loss to a little less than 8%. Copper is off slightly and is down 4% this week. It is the fourth consecutive weekly fall and it has shed around 15% during this run. After being almost limit up yesterday on the back of a sobering report from the USDA, July wheat has stabilized so far today.
Asia Pacific
News that the extended lockdown of Shanghai may end as early as this weekend appears to have helped global markets stabilize today. Reports suggested officials expect "no community spread" of Covid by mid-May. There was a slight rise in cases in Beijing but officials deny that it was edging toward a lockdown as it tries to calm fears that appeared to have spurred panic food shopping and hoarding. Separately, China reported its lending figures collapsed in April. Aggregate financing, which includes banks and shadow bank lending, fell to CNY910 bln. Economists had under-appreciated the impact of the lockdowns and had forecast (median Bloomberg survey) a CNY2.2 trillion increase. Bank lending accounted to about 2/3 of the increase....
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