Monday, May 20, 2024

Capital Markets: "Jump in Japanese Bond Yields Fails to Lift the Yen"

From Marc to Market:

Overview: The foreign exchange market is quiet. Most of the G10 currencies are +/- 0.1% against the dollar. The crash that took the of Iran's president and foreign minister may have helped lift gold to new record highs ($2450), the impact seems more muted, as poor weather rather than foul play, seems to be main narrative. July WTI reached nearly $80, its best level since May 1 but is hovering around unchanged levels (~$79.50). Canadian markets are closed today for a national holiday, while no fewer than five Fed officials speaks today, which includes three governors and two regional presidents who vote on the FOMC this year.

The MSCI Asia Pacific Index rose 2.4% last week and it has not had weekly loss since the week ending April 19. It is off to a firm start this week. All the large and most small bourses in the region rose. The market initially seemed impressed with Beijing's latest initiative to support the property market but shares in the sector fell today (snapping a three-day rally). It is seen as too small. Europe's Stoxx 600 fell in the last two sessions but has come back from the weekend a bit firmer. US index futures are also trading with a firmer bias. Japan's 10-year yield has taken out the high set at the end of last year, edging closer to 1.0%. It has risen for six of the past seven weeks coming into this week. The 30-year JGB is pushed above 2.0% today for the first time since 2011. European bonds are narrowly mixed, and the 10-year US Treasury is off one basis point to 4.41%. Last week's low was near 4.30% and the high was near 4.53%....