The Global Macro Pulse

Following a rise in the S&P 500 of just under 0.1% overnight, futures are essentially flat and the US 10yr Treasury yield has risen 2bps to 2.7663%. The Nikkei is up 1.8%, propelled by yen weakness, but other Asian equity markets are mixed. The HSI and Taiex are down 0.7% and 0.2% respectively while the Shanghai Comp and Kospi are up 0.5% and 0.7% respectively.

AUDUSD has fallen to 0.9336 in response to a fall in the NAB business confidence index. USDJPY rallied to 99.49 and EURUSD has fallen slightly from its overnight high to trade at 1.3398. EM Asia dollar pairs are mixed. USDKRW is at 1070.95, down from its overnight high of 1072.73, USDSGD has fallen to 1.2481, pushing the SGD nominal effective exchange rate up sharply to a new high and just below the top of its policy bands. However, the deficit currencies, the IDR and INR are both weaker at 11584 and 63.49 respectively vs. the USD. USDCNY fixed 3pips lower to 6.1360, pushing the CNY TWI up to its highest level since mid-September.

Most Asian rates markets have followed Treasury yields up. JGB yields are up about 1bps, The Hong Kong and Singapore curves bear steepened again with swap rates up 1 – 5bps in the former and 1 – 3bps in the latter. Indian rates are up 4 – 5bps and the 10yr government yield has jumped 10bps in response to INR weakness. Korean rates are up 1 – 2bps. In contrast, a second consecutive fall in China’s 7-day repo rate, down 11bps today, has pulled swap rates 7 – 9bps lower.