Asian bonds fell overnight, mirroring the selling of Treasuries in the earlier US session. 10y benchmark yields in Australia, New Zealand and Japan all increased. USDJPY has been steadily gaining since the (still unconfirmed) government intervention a couple of weeks ago and currently trades at 155.59. Investors are essentially saying that the interest rate differential does not support the Yen at that lower level. Masato Kanda, Japan's top currency official has said the country would be ready to take appropriate action when necessary, but investors clearly do not feel that there will be significant hiking in Japan.
Chinese stocks had a good session overnight - CSI 300 increased to a 29-week high of 3668.00. Over the past 4 weeks, the CSI 300 Index gained 4.64%. This seems to be on positive sentiment and hopes are growing that a Chinese recovery is gathering momentum after both exports and imports beat expectations in April. Other analysts remain cautious touting tactical recovery from oversold positions as a key reason for this 'bounce' in Chinese equities.
In the US the picture is a little less rosy, ARM reported lacklustre revenue projections yesterday. These disappointing figures made investors nervous that tech companies are slowing down spending on AI software, ARM dropped around 10% in afterhours trading. Intel shares also fell after their license to sell chips to Huawei was revoked. Airbnb shares also fell following signs of slowing growth.
In commodities, the Biden administration has officially raised the cap on the price that they are willing to pay to refill the country's emergency oil reserves - to $79.99 a barrel (previous was informally $79). Oil reserves in the states are currently near a 40-year low. Front month crude closed at 79.39 yesterday.
On the data front today we have the Bank of England interest rate decision where rates will likely be held at 5.25, at midday. We also have US initial jobless claims at 1:30.
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