Thursday 17th May: Asian markets mixed as US Treasury yields hit 3.10

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Thursday 17th May: Asian markets mixed as US Treasury yields hit 3.10 1

Global Markets:

  • Asian Stock Markets : Nikkei up 0.64%, Shanghai Composite down 0.31%, Hang Seng down 0.11%, ASX down 0.43%
  • Commodities : Gold at $1291.10 (-0.03%), Silver at $16.40 (+0.15%), Brent Oil at $79.40 (+0.15%), WTI Oil at $71.72 (+0.32%)
  • Rates : US 10-year yield at 3.104, UK 10-year yield at 1.502, Germany 10-year yield at 0.615

News & Data:

  • (AUD) Unemployment Rate 5.60% vs 5.50% expected
  • (AUD) Employment Change 22.6K vs 19.8K expected
  • (USD) Crude Oil Inventories -1.4M vs -1.1M expected
  • (USD) Mortgage Delinquencies 4.63% vs 5.17% previous
  • (USD) Industrial Production m/m 0.70% vs 0.60% expected
  • (USD) Capacity Utilization Rate 78.00% vs 78.40% expected
  • (USD) Housing Starts 1.29M vs 1.32M expected
  • (USD) Building Permits 1.35M vs 1.35M expected
  • (CAD) Manufacturing Sales m/m 1.40% vs 1.10% expected
  • (EUR) Final CPI y/y 1.20% vs 1.20% expected

Markets Update:

Asian markets are mixed today, as increased US treasury yields poses a threat to investor sentiment. Increased yields have made emerging markets less lucrative for investors, not to mention significant equity outflows.

Overnight, Wall Street mostly advanced – however, the sentiment did not reflect as much in Asian markets. That said, the constructive tone of the US-China trade talks continue to lend support to the markets.

Japanese markets are rising in line with cues from the Wall Street, with a weaker yen adding to the party. Investors shrugged off weak Japanese core machinery orders data for March. The Australian market is declining, with banks leading the decliners. Mining and oil stocks are mostly higher.

In currency markets, the euro rose 0.2 percent, regaining some composure after having set a five-month low of $1.1763 on Wednesday. Worries about political risks jolted Italian markets and pressured the euro following reports that Italy’s anti-establishment 5-Star Movement and anti-immigrant League may ask the European Central Bank to forgive 250 billion euros of debt as the parties worked to draft a coalition program.

Yields on 10-year U.S. Treasuries hit 3.10 percent on Wednesday for the first time since July 2011, continuing to weigh on stocks as investors considered whether U.S. government bonds might be more attractive than riskier equities.

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