US TSYS: Futures Reopen Slightly Stronger
Mar-12 22:37
In today's Asia-Pac session, TYM5 is 110-22, 0-01+ from closing levels.
- After initially plunging when the data was released, US yields quickly rebounded to new session highs, higher levels of the day. The 2-year yield was up by 4bps to 3.99%, while the 10-year yield rose to 4.31%, up 3bps.
- Headline CPI inflation data came out lower than expected (0.2% vs. 0.3% est, 0.5% prior). However, focus quickly turned to Core & Supercore CPI - while lower than expected - remained hot: Core CPI surprisingly eased to 3.12% Y/Y in February (cons 3.2) from what had been a surprisingly strong 3.26% in January.
- Supercore (core services ex-housing) inflation pulled back more than expected on the month, although as noted above, it was dragged lower by softer-than-expected airfares and vehicle insurance (for which PPI and not CPI feed into PCE).
- Tsy June'25 10Y climbed to 111-07 high briefly but retreated to 110-15.5 low in the minutes after CPI, the 10Y contract finished at 110-20+ (-6.5), above initial technical support at 110-12+/110-00 (Low Mar 6 / High Feb 7).
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GOLD: Gold Reaches New Highs with $3,000 in Sight
Feb-10 22:24
- Gold touched new all time highs overnight as headlines on potential tariffs on steel and aluminum shook investor confidence.
- Gold’s rise was steady and consistent throughout the day reaching a new high of $2,911.72, before closing at $2,908.22.
- Gold’s ‘safe-haven’ status ensures that in periods where the unpredictability of President Trump’s comments or threats on tariffs spooks markets, gold climbs.
- Evolving news out of China could have material impact for gold as a pilot program for insurance funds is being launched that allows diversification of their asset allocation into gold; with estimates ranging of US$25 to $30 billion could be allocated to the scheme.
- Gold’s appeal is having far reaching impacts globally with South African listed goldminers jumping 2.3% on Monday, following Trump headlines on tariffs.
- Given Gold is impacted by interest rate movements, the day ahead sees the Federal Reserve Chairman Jerome Powell’s semi-annual testimony to lawmakers where market observers will pore over every word for hints as to the direction of interest rates.
JPY: Yen Rally Falters, But USD/JPY Bear Threat Remains, Local Mkts Shut Today
Feb-10 22:05
After outperforming last week, yen gave back some ground during Monday trade. USD/JPY is currently track near 152.00 in early Tuesday dealings (having lost nearly 0.40% for Monday's session). Yen was marginally the worst performer in the G10 space with NZD next.
- USD/JPY briefly extended its recovery from Friday’s lows to around 150 pips, printing a 152.54 session high during the European session on Monday. Overall, this recovery for Cross/JPY appeared to be very much a correction to the broader developing theme we saw last week, and across the US session these moves did reverse.
- The reversal in USD/JPY and some yen crosses coincided with light bid in core FI markets as US trade unfolded on Monday, although volumes were light. US-JP yield differentials sit up from recent lows, although ticked down for Monday trade, the 10yr spread last just under +320bps. The generally positive global equity tone on Monday, likely trimmed yen appetite, despite further Trump tariff pledges.
- Technicals for USD/JPY haven't changed much, with a bearish theme still intact. 151.06, 76.4% of the Dec 3 - Jan 10 bull leg, has been pierced. A clear break of it would open 149.69, the Dec 9 low. Firm resistance is seen at 154.70, the 50-day EMA. Note that the pair has entered oversold territory. We noted this point late last week, which may be driving some caution on entering fresh USD/JPY positions at the current juncture.
- Note onshore markets are closed today for National Foundation Day.
ASIA: Government Bond Issuance Today.
Feb-10 22:03
- Bank Indonesia to Sell 28D SVBI Bills
- Bank Indonesia to Sell 365D SVBI Bills
- Bank Indonesia to Sell 90D SVBI Bills
- Bank Indonesia to Sell 181D SVBI Bills
- Bank Indonesia to Sell 273D SVBI Bills
- Thailand to Sell THB30b of 2028 Bonds.
- MAS to Sell S$22.5 Billion 84-Day Bills
- MAS to Sell S$15.9 Billion 28-Day Bills
- Hong Kong to Sell HK$63.455 Billion 91-Day Bills
- Hong Kong to Sell HK$3 Billion 364-Day Bills
- Hong Kong to Sell HK$16 Billion 182-Day Bills
- Philippines To Sell PHP 30.0Bln 2032 Bonds (PIBD1032I695*)
