Monday 25th March: Asian markets lower as US yield curve.inverts

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Monday 25th March: Asian markets lower as US yield curve.inverts 1

Global Markets:

  • Asian Stock Markets : Nikkei down 3.01%, Shanghai Composite down 1.70%, Hang Seng down 2.20%, ASX down 1.11%
  • Commodities : Gold at $1321.35 (+0.20%), Silver at $15.44 (+0.23%), Brent Oil at $66.33 (-0.63%), WTI Oil at $58.52 (-0.88%)
  • Rates : US 10-year yield at 2.437, UK 10-year yield at 1.017, Germany 10-year yield at -0.016

CFTC Positioning Data:

EUR short 78K vs 80K short last week. Shorts decreased by 2K.
GBP short 14K vs 37K short last week. Shorts trimmed by 22K.
JPY short 59K vs 59K short last week. No changed.
CHF short 27K vs 23K short last week. Shorts increased by 4K.
CAD short 48k vs 41k short last week. Shorts increased by 7K.
AUD short 52k vs 60k short last week. Shorts trimmed by 8K.
NZD short 1K vs 4K long last week. Longs erased.

News & Data:

  • (CAD) Trimmed CPI y/y 1.90% vs 1.80% expected
  • (CAD) Retail Sales m/m -0.30% vs 0.40% expected
  • (CAD) Median CPI y/y 1.80% vs 1.70% expected
  • (CAD) Common CPI y/y 1.80% vs 1.80% expected
  • (CAD) Core Retail Sales m/m 0.10% vs 0.20% expected
  • (CAD) CPI m/m 0.70% vs 0.60% expected
  • (EUR) Flash Services PMI 52.7 vs 52.7 expected
  • (EUR) Flash Manufacturing PMI 47.6 vs 49.5 expected
  • (EUR) German Flash Services PMI 54.9 vs 54.8 expected
  • (EUR) German Flash Manufacturing PMI 44.7 vs 48 expected
  • (EUR) French Flash Manufacturing PMI 49.8 vs 51.4 expected
  • (EUR) French Flash Services PMI 48.7 vs 50.6 expected

Markets Update:

Asian stock markets are notably lower and the safe-haven Japanese yen rose to a six-week high on Monday as weak economic data from Europe and an inverted yield curve in the U.S. stoked fears of a recession.

Investors also digested news that Special Counsel Robert Mueller’s investigation did not find any evidence that showed U.S. President Donald Trump’s campaign conspired with Russia during the 2016 presidential election.

The Nikkei 225 in Japan dropped more than 3 percent in the afternoon, with shares of index heavyweights Fast Retailing, Softbank Group and Fanuc all falling sharply. The Topix index declined 2.5 percent. Shares in mainland China tumbled by the end of the morning session, with the Shanghai composite and Shenzhen component both declining more than 1.5 percent each. Meanwhile, the Hang Seng index in Hong Kong dropped 2.2 percent as shares of Chinese tech giant Tencent fell more than 2.5 percent. In Australia, the ASX 200 fell more than 1 percent as almost all sectors saw losses.

U.S. 10-year treasury yields were last 1.9 basis points below three-month rates after yields inverted for the first time since 2007 on Friday. Historically, an inverted yield curve – where long-term rates fall below short-term – has signalled an upcoming recession. Compounding fears of a more widespread global downturn, manufacturing output data from Germany showed a contraction for the third straight month.

In forex markets, the Japanese yen – a perceived safe haven – held near its highest since Feb. 11. It was last barely changed at 109.9 per dollar. The Australian dollar, a liquid proxy for risk play, was flat at $0.7082 after two third straight sessions of losses.

Upcoming Events:

Monday, March 25, 2019

  • 07:00 AM GMT – (USD) FOMC Member Evans Speaks
  • 10:00 AM GMT – (EUR) German Ifo Business Climate
  • 10:15 PM GMT – (AUD) RBA Assist Gov Ellis Speaks
  • 10:45 PM GMT – (NZD) Trade Balance

Tuesday, March 26, 2019

  • 01:30 AM GMT – (USD) FOMC Member Rosengren Speaks
  • 11:30 AM GMT – (USD) FOMC Member Evans Speaks
  • 12:00 PM GMT – (GBP) MPC Member Broadbent Speaks
  • 01:30 PM GMT – (USD) Building Permits
  • 03:00 PM GMT – (USD) CB Consumer Confidence

Wednesday, March 27, 2019

  • 12:00 AM GMT – (AUD) RBA Assist Gov Kent Speaks
  • 02:00 AM GMT – (NZD) Official Cash Rate
  • 02:00 AM GMT – (NZD) RBNZ Rate Statement
  • 09:00 AM GMT – (EUR) ECB President Draghi Speaks
  • 01:30 PM GMT – (CAD) Trade Balance
  • 10:30 PM GMT – (USD) FOMC Member George Speaks

Thursday, March 28, 2019

  • 01:00 AM GMT – (NZD) ANZ Business Confidence
  • All Day – (EUR) German Prelim CPI m/m
  • 12:15 PM GMT – (USD) FOMC Member Quarles Speaks
  • 01:30 PM GMT – (USD) Final GDP q/q
  • 02:30 PM GMT – (USD) FOMC Member Clarida Speaks
  • 03:00 PM GMT – (USD) FOMC Member Bowman Speaks
  • 06:00 PM GMT – (CHF) Gov Board Member Maechler Speaks
  • 09:00 PM GMT – (NZD) RBNZ Gov Orr Speaks
  • 10:20 PM GMT – (USD) FOMC Member Bullard Speaks

Friday, March 29, 2019

  • 10:30 AM GMT – (GBP) Current Account
  • 10:30 AM GMT – (GBP) Final GDP q/q
  • 10:30 AM GMT – (GBP) Net Lending to Individuals m/m
  • 01:30 PM GMT – (CAD) GDP m/m
  • 01:30 PM GMT – (CAD) RMPI m/m
  • 01:30 PM GMT – (USD) Core PCE Price Index m/m
  • 01:30 PM GMT – (USD) Personal Spending m/m
  • 02:45 PM GMT – (USD) Chicago PMI
  • 03:00 PM GMT – (USD) Revised UoM Consumer Sentiment
  • 05:00 PM GMT – (USD) FOMC Member Quarles Speaks
  • Tentative – (GBP) Parliament Brexit Vote
  • &more… 

 

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