Players Are Not Buying Everything Today

Overview: The rally of US benchmarks to new record highs helped lift most Asia Pacific markets today, but the bulls are pausing in Europe, and there has been little follow-through buying of US shares. Australia, South Korea, and Indonesia did not participate in today's regional advance led by a 2% rally in China's main indices. Most European markets are lower, and the Dow Jones Stoxx 600 may post its first loss of the month.US shares are trading a bit lower. The US 10-year note began recovering yesterday as buyers emerged as the yield approached 1.20%. It is not below 1.15% and set to snap an eight-day rise. European bonds are slightly lower and Italy's 10-year has edged to a new record low of almost 50 bp. The dollar had begun off firmly yesterday after the pre-weekend drop in response to the disappointing employment report. Still, as the session progressed, it softened, and today, it is being sold across the board. The yen and Swiss franc are the strongest (~0.6%), while as typically the case in periods of a soft greenback, the Canadian dollar is a laggard (~0.2%). Nearly all the emerging market currencies are also firmer today, with the notable exception of the Turkish lira, which is off about 0.3%. Gold is higher for a third session. It has risen from last Thursday's low of $1785 to poke above $1847.50 today. The surge in oil prices continues, and the March WTI is up for the seventh consecutive session. It is consolidating after reaching a high slightly above $58.60 today. Recall it ended January near $52.20.  

Asia Pacific

China reported a surge in January lending, a typical calendar effect as new lending quotas are available. New yuan loans, which is about bank lending, rose to CNY3.58 trillion, up from a revised CNY1.26 trillion in December. For comparison, December 2019 and January 2020 figures were CNY1.14 and CNY3.34, respectively. Aggregate financing includes bank lending and activity from the so-called shadow banking sector, which in China includes banks and non-bank lenders' wealth management arm. It surged to CNY5.17 trillion from CNY1.72 trillion. While these are strong lending figures, it has not shaken the sense that officials are trying to rein in leverage, and the slowing in M2 growth support such suspicions.  

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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