LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)

JGB futures are holding weaker but sitting in the top half of today’s range, -15 compared to the settlement levels.

• There hasn’t been much in the way of domestic drivers to flag. An Enhanced-Liquidity Auction of 5-15.5-year JGBs is due later.
• The BoJ is concerned the soft yen could weaken the wage-price relationship (See MNI Policy MainWire)
• (Bloomberg) -- Japan’s finance minister stopped short of issuing his strongest warning on possible market intervention in comments that fueled renewed yen weakness after the currency slumped to a fresh 34-year low overnight. (See link)
• Cash US tsys are ~1bp cheaper in today's Asia-Pac session after yesterday's sell-off. Fed Chair Powell, Vice Chair Philip Jefferson and Richmond Fed President Thomas Barkin are scheduled to speak later today.
• Cash JGBs are slightly cheaper across benchmarks. The benchmark 10-year yield is 0.6bps higher at 0.870% after setting a fresh YTD high of 0.884% earlier today.
• The swaps curve has twist-steepened, with rates 3bps lower to 1bp higher. Swap spreads are tighter across maturities.
• Tomorrow, the local calendar sees Trade Balance data alongside BoJ Rinban operations covering 1- to 25-year JGBs.

Regional Asian equities are lower today and have slid the most in eight months with the MSCI Asia Pacific Index down more than 2% as the uncertainty around what Israel will do remains, while US retail sales data rose last month by more than forecast, suggesting the Fed may not rush to lower rates which pushed up Treasury yields and boosted the dollar while local Asian currencies trade near their cycle lows, elsewhere Volatility has picked up with the premium for one-month put options to protect against a pullback in US equities hitting 19.23 the highest since October 2023

• Japanese stocks fell after strong US economic data rekindled concerns that the Federal Reserve will delay its interest rate cuts, damping investors’ demand for riskier assets. Investors also continue to monitor tensions in the Middle East. The yen remains under pressure, after surging to a new 34-year low against the USD overnight. The increasing risk that authorities in Tokyo may intervene in the market to stem the drop still lingers, after Japan’s finance minister warned that he’s ready to take all available measures in the foreign exchange market if needed. The Topix is down 2.21% while the Nikkei fares slightly worse down 2.26%
• South Korea’s Kospi has dropped over 2% and is now the worst performing market in the region today, with tech and EV battery sectors leading losses after strong US retail sales data and higher US Treasury yields. Earlier SK import prices fell 0.7% in March from a year ago, while export prices increased 2.6%. The KRW continues to fall and is now approaching 1,400 won which is also weighing on the local stock market. Foreign funds sell 348b won worth of Kospi equities in early trading, local funds also sell while retail investors buy, the Kospi is down 2.38%
• Taiwan equities are following regional markets lower today, there is very little local market news or data out for Taiwan, the market will largely be dictated by China data, global yields and global semiconductor prices. The Taiex is current down 2.86%
• Australian equities follow global markets lower with the ASX200 now down 1.80% as banks and mining stocks contribute the most to the mover lower, elsewhere the AUD continues to fall after mixed China data hurts futures growth, with the currency now down 0.28% at 0.6424 the lowest levels since Nov 2023.
• Elsewhere in SEA, New Zealand Equities are down 1.00%, Singapore equities are down 1.30%, Malaysian equities are 0.37% lower. Philippines equities are under some real pressure, the PSEi is now down 8.72% from recent highs made early April, after breaking support levels last week, the index is down another 1.70% today and has erased all yearly gains, Indonesia has returned from a 10-day break with yields surging, currency has plummeted and equities are down about 2%.