Archives of “March 30, 2021” day

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USD/JPY touches 110.00 for the first time in a year amid higher Treasury yields

  
  Analysis

USD/JPY hits 110.00 for the first time since 26 March last year

USD/JPY D1 30-03

The figure level will still offer a key battleground for buyers and sellers in the day ahead but keep your eyes on Treasuries for more clues. 10-year yields are up by nearly 4 bps to close in on the March highs just below 1.75% and that is pressuring the yen lower.

There are large expiries for USD/JPY layered at 110.00-20 rolling off tomorrow so that might still help to keep price action in-check ahead of the month-end, quarter-end.
But with the market eagerly awaiting more infrastructure spending plans by Biden and the Fed holding the steeper for longer narrative, we are quickly shifting back to another selloff in Treasuries and that is still among the key factors at play currently.

Bank of Japan Governor Kuroda talking again – global, Japan, economies showing signs of bottoming out

  
Analysis, Economy

Kuroda speech, sticking to his script and not adding anything new or surprising.

 

  • global economy showing signs of hitting bottom, Japan’s economy showing similar signs
  • impact of covid-19 on Japan’s economy to persist for prolonged period
  • Japan’s economy to experience clear, positive growth in fiscal 2021
  • risks to Japan’s economy, prices skew to downside
  • BOJ will take additional easing steps without hesitation if needed
  • says YCC exerting intended effect on economy
  • BOJ must stem any sharp rise in interest rates, have made tools available to do so in March review
  • BOJ must keep entire yield curve stably low while impact of pandemic continues

 

  • says steps taken at March review allow boj to promote powerful monetary easing even further
  • while it is taking time, it’s possible to achieve BOJ’s 2% inflation target by maintaining easy policy

 

 

This one ….

 it’s possible to achieve BOJ’s 2% inflation target 
It is also possible I will have a dinner date with Gigi Hadid, and it may take time. But don’t go basing any trades on that, K?

FTSE Russell to include Chinese sovereign bonds in its flagship bond index from starting later this year

  
  Analysis

This will prompt further large inflows into China.

  • Chinese government bonds (CGBs) will be included in the FTSE World Government Bond Index (WGBI) from the end of October
  • will be phased in over three years
  • Chinese government bonds were previously included in index suites from JPMorgan and Bloomberg Barclays, but FTSE WGBI inclusion is expected to have a larger effect due to the size of passive flows tracking it

A reminder of the OPEC+ meeting this week – rollover of existing output cuts expected

  
Analysis, Crude

This will not be news to anyone following along. OPEC+ meeting is on April 1 (JMMC meets the day before)

Market consensus is for another rollover of OPEC production cuts. OPEC (especially Saudi Arabia) have been cautious on the demand recovery and that will not change at this meeting:
  • renewed lockdowns in Europe
  • the US is looking better (accelerating vaccination efforts)
  • on the supply front, there is still plenty and the disruption from the Suez blockage will pass in coming weeks

Its Tuesday in Asia and the focus is already shifting to Wednesday

  
  Analysis

Wednesday 31 March will bring the latest PMI data from China and, during the US session Biden speaking on his US$3tln infrastructure plan.

For China, due at 0100 GMT on the 31st, China official PMIs for March

  • Manufacturing expected 51.2, prior 50.6
  • Non-manufacturing expected 52.0, prior 51.4
  • Composite prior 51.6
For Biden, around half of the $3tln plan is expected to be announced (a second infrastructure announcement will follow at a later date) but markets could be more interested in any comment the Prez has on new taxes (the extent of the unwinding of the 2017 corporate tax cut and of course any increase to the top-end personal income tax rate).

Dow posts a record close. Nasdaq underperforms.

  
Analysis, US Market

Russell 2000 falls -2.8%

The Dow is closing at a record close. The Nasdaq lagged with the Russell 2000 of small-cap stocks taking it on the chin.
The final numbers are showing:
  • S&P index fell -3.35 points or -0.08% at 3971.19
  • Nasdaq fell -79.07 points or -0.60% at 13059.64
  • Dow rose 98.43 points or 0.3% at 33171.31
  • The small-cap Russell 2000 fell -62.8 points or -2.83% at 2158.50.
Below is a summary of him the % changes for the major global indices to start the trading week:
Global changes for equity
Yields rose with the yield curve steepening in the US today which has tended to weaken the high tech growth stocks.
  • 2 year rose 0.7 basis points to 0.140%
  • 10 year rose 3.3 basis points to 1.709%
  • 30 year rose 3.0 basis points to 2.408%
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