5/13/2021 11:12:35 AM GMT
Overview: It is as if the bond vigilantes were pushed too far. US inflation is accelerating more than expected, and it cannot all be attributed to the base effect, and the Federal Reserve, to many investors, is tone-deaf. With powerful fiscal stimulus, nominal growth above 10%, and the economy re-opening, albeit unevenly, does the monetary accelerator need to be fully engaged? The US 10-year yield jumped, providing a nice concession at the quarterly refunding and lifted the dollar broadly. Stocks got hammered, and still no safe-haven bid for Treasuries. Near 1.70%, the yield is almost 25 bp above the post-jobs disappointment low. The sharp sell-off in US shares, which continues today, with the futures indices off 0.3%-0.5%, knocked Asia Pacific bourses 1%-2% lower and the MSCI Asia Pacific Index is now nearly flat on the year. Europe s Dow Jones Stoxx 600 appeared resilient yesterday but is off about 1.3% today to bring the week s drop to almost 3%. Bonds h
5/10/2021 11:01:14 AM GMT
Overview: Last week s cyberattack on the largest US gasoline pipeline continues to lift oil and gasoline prices. The June gasoline futures gapped higher to extend last week s 2.4% but has subsequently moved lower to enter the gap. June WTI is firm and holding above $65. The supply disruption is key, but iron ore prices soared 10% on strong Chinese demand. More broadly, the CRB Index settled last week at six-year highs. Led by South Korea, Asia Pacific equities markets moved higher, and Australia s ASX rose to a new record high. Europe s Dow Jones Stoxx 600 is up fractionally but sufficient to also set a new record high. US futures are narrowly mixed, with the NASDAQ trailing. The US 10-year yield recovered smartly after the sharp and quick drop on the back of the weak jobs data. It is steady today near 1.58%. European yields are narrowly mixed. The UK Gilt yield is up a couple of basis points, while Australia and New Zealand saw their 10-year yield rose thr