The Global Macro Pulse

The S&P 500 fell 0.3% overnight, but futures have rallied 0.5% in Asia. The Nikkei is up 0.8%, the HSI has risen 0.3%, Kospi is up 0.2% and Shanghai is flat. The US 10yr Treasury yield has traded flat at 2.6696 after rising just under 7bps in New York.

What looks to be position reduction in EURJPY shorts has worked to push EURUSD up to 1.3512 and USDJPY up to 98.70. AUDUSD has risen to 0.9542. USDCNY continues to fix sideways ahead of the beginning of the 3rd Plenum this weekend, rising 28pips today to 6.1475. Most EM Asia dollar pairs have risen today. The INR has underperformed, weakening 0.5% to 61.90, the IDR has fallen 0.3% to 11,391 and traded briefly above 11,400 and the MYR has softened to 3.1811. USDKRW stands out for having rallied initially, but reversing this in the late morning to fall to 1061.03.

The belly of the JGB curve is essentially unchanged, but long-end yields have fallen 1 – 1.8bps. Yields in most Asian markets are up, following the overnight move in US Treasuries. Despite a 36bps fall in China’s 7-day rate, swap rates are up 5 – 14bps. Yields in most other markets are up 2 – 3bps with Malaysian 10s up 5bps and Thai 10s up 6bps.