Markets:
- Gold down $3 to $1888
- US 10-year yields up 2.4 bps to 4.28%, touches 4.33%
- WTI crude oil up 67-cents to $80.05
- S&P 500 down 34 points
- JPY leads, AUD lags
Two things are driving market sentiment right now: 1) Rising bond yields 2) China economic worries. Those two aren’t unrelated as China directed banks to step up yuan intervention last week and they may be selling Treasuries to fund those moves, or at least not buying as many Treasuries.
USD/CNH retraced today and so did the broad US dollar, despite new highs for the year in long-dated yield. That runs against the recent narrative but have been helped along by equity market weakness, particularly late in the day as USD/JPY fell to 145.62 from 146.25. In Asian trade earlier, the pair hit a 2023 high of 146.50 and intervention is now what reporters are calling about.
Asia is the hot session right now and we get Japanese CPI later,…
