1) It was too frustrated that US long-end treasury yield ended higher than yesterday, albeit the rate was plunging by more than 8 bps in 10 year tenor in Asia market. UST 10y rate was up 0.7bp and 30y was up 3bp, so yield curve steepened. News said this weakness in bond market reflected not too bad US equity market despite additional CNY devaluation, the burden of bond auction, and the expectation that Fed could hike the base rate at last.
Current financial environment is just within volatility? Maybe yes, but it's so hard to define whether this is simple range market or not. Anyway, I bought UST 30yr yesterday in early London market and lost, although it was a short-cover a little bit...
2) Oil price gained too small while BDI plunged by -69pt to 1,093 further and recorded bigger loss than yesterday's -35pt. As I noted in yesterday's daily summary, this trajectory should pass weaker momentum in line with diminishing seasonal effect. In contrast, if BDI show up-turn, we may re-think about global trade momentum which have shown big negative trend.
Oil price was a little bit up in line with postive forecast about future's demand of oil, news said... I don't think this is really reflected. Something like this couldn't be any materials in oil market.
3) US job opening rate in June released yesterday. It showed solid growth rate, 3.6%.
(We should draw the Beverage Curve with this to check where we are. Let's do this, later.)
4) PBOC devalued CNY against USD in 3 consecutive days, by 1.11% to 6.0410 today. Following yesterday's intervention, they held the special interview today. PBOC denied the possibility of continuing CNY depreciation. Some economists started to recognize it would not be currency war.
5) Today's markets seemed to be somewhat relief in line with this or just moved on technical influences. The main Asian equity indexes rose including Korea and Shanghai A. USD/KRW dropped 16.6won to 1,174.2 won, lower than 2 days ago.
6) Korean bond yield rose as well with hawkish BOK monthly meeting. BOK hold policy rate unanimously. They consider CNY devaluation as only risk factor, not a current threat.
7) Non-Asian EM looks like free from Chinese issue, yesterday, either. It could mean the downside risk of commodities market would be limited from now on...
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