The Global Macro Pulse

S&P futures are up 0.2% in Asia following a 0.8% rally in the S&P 500 overnight partly in response to the dovish tone of Janet Yellen’s prepared testimony. Asian equities rallied across the board as the Nikkei rose 2.1%, the Hang Seng Index was up 0.9%, Kospi was up 0.7% while the Shanghai Comp rose 0.5%. The US 10y Treasury yield climbed 2bps to 2.7231% after falling a bit over 7bps in New York.

The USD opened weaker against major currencies in Asia, but has recovered most of its early losses. AUDUSD is at 0.9343, EURUSD is at 1.3468, and USDJPY rallied to 99.65. EM Asia currencies are almost all stronger against the dollar. The KRW gapped 0.5% stronger to 1067.45 where it flatlined, seemingly with help from intervention, while the MYR initially rallied as much as 0.8% before softening back to a 0.5% gain to 3.1956. USDCNY fixed 27bps to 6.1315 a new historic low. USDIDR onshore spot is flat at 11,550, but the offshore fix and 1m NDF have dropped about 2% while USDINR is down about 0.5%.

JGB yields are down marginally, but rates in most other Asian markets are down in sympathy with Treasuries. Swaps in Hong Kong and Singapore rallied 2 – 7bps and 2 – 5bps. Rates in India, Korea, and Malaysia are down 1 – 2bps while the back end of the Thai curve fell 4 – 5bps. China continues to do its own thing, driven by a 57bps rise in the 7-day repo rate that pushed swap rates up 3 – 5bps.