Overnight Price Action
Asian stocks were mixed, with the Nikkei and Kospi up 1.2% and 0.6% respectively and the HSI slipping 0.2%. European stocks were weaker on concerns that the US Federal Reserve will reduce its debt purchases. The Stoxx Europe 600 Index retreated 1.9% to 302.5.
The USD fell across its major counterparts, with the EURUSD rate up 0.12% to 1.2957. Asian currencies also had mixed fortunes; the USDJPY was down 0.01% at 101.15 while the AUD and NZD rose 0.2% and 0.11% to 0.9653 and 0.8106 respectively. In EM Asia, the INR fell 0.37% to 56.17 against the USD whereas the KRW rose 0.4% to 1128.40. The PBoC fixed USDCNY 36 pp lower
at 6.1820.
In the meantime, US Treasuries look set to end the month 1.8% down on the back of expectations of tapering debt purchases. Japan’s 10-Y rate also slipped 3.5 bps to 0.90.
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Credit Suisse