Elsewhere in Europe, German 10-year yields dropped as much as seven basis points to -0.089 per cent, having slid below zero percent last week. Market watchers have raised the spectre of «Japanification,» where inflation, growth and yields remain permanently low.
«The bund curve is becoming ‘Japanified’ as the market prices out the chance of future ECB hikes,» said Chris Attfield, a fixed-income strategist at HSBC Holdings. «There’s a long way to go before we’re as flat as JGBs, so we think there’s still value if the ECB fails to lift off.»
Full article here: https://www.afr.com/markets/market-data/bonds/warning-signals-from-german-bond-market-20190328-p518b3
Markets continue to see-saw, with Wall Street slipping to set up a mixed start for the ASX, according to IG Markets’ Kyle Rodda.
The one-day-up, one-day-down pattern of trade on Wall Street continues.
The same simple binary that’s driven market activity for weeks is behind this dynamic: a competition between fears regarding the slowing global growth outlook, and the appeal of risk taking in a financial market environment plagued by tumbling yields.
The pattern is showing few signs of abating and speaks of a market that is consolidating before a clearer-cut direction is formed.
Wall Street’s lead is manifesting as a mixed-picture for Asian markets today, according to futures. Provided this materialises, it will be an extension of the region’s equities own theme.
As it presently trades, SPI Futures are suggesting that the ASX200 will open slightly lower this morning, if not flat; as will the Hang Seng and Nikkei; but the CSI300 ought to open a touch higher – though this is based on a future’s price that reflects price action from yesterday evening’s trade.
Despite the sound and fury coming out of London overnight, US-based OppenheimerFunds manager Alessio de Longis says the impact of Brexit on global markets will be reasonably limited:
«A day after the referendum, Brexit was seen as a global event, then a few months into it, it became a European event, and now it’s really a local event».
«Ultimately, unless you are a day-to-day trader, for medium to long-term investors all that matters with politics, headlines and all these other developments, is really — ‘What does that do to fundamentals? What is that doing to growth and other macro variables?»‘
As this article notes, this is in contrast to 2016 — when when the Brexit referendum was a seismic shift for markets around the world, with the pound sliding by the most on record to a 30-year low.
All the overnight markets action:
- SPI futures down 3 points to 6110 at 5.50am AEDT
- AUD -0.8% to 70.81 US cents at 5.04am AEDT
- On Wall St at 2.50pm: Dow -0.1% S&P 500 -0.4% Nasdaq -0.7%
- In New York, BHP +0.8% Rio +0.05% Atlassian -4.4%
- In Europe: Stoxx 50 +0.1% FTSE flat CAC -0.1% DAX flat
- Spot gold -0.4% to $US1310.35 an ounce
- Brent crude -0.4% to $US67.72 a barrel
- US oil to -0.5% to $US59.63 a barrel
- Iron ore -0.1% to $US85.11 a tonne
- Dalian iron ore -0.2% to 612.50 yuan
- LME aluminium +1.3% at $US1911 a tonne
- LME copper flat to $US6335 a tonne
- 2-year yield: US 2.19% Australia 1.47%
- 5-year yield: US 2.14% Australia 1.43%
- 10-year yield: US 2.36% Australia 1.77% Germany -0.09%
- US-Australia 10-year yield gap: 59 basis points
On the economic agenda today:
Eurozone M3 money supply February, economic confidence March, business climate indicator March and consumer confidence March; US GDP Q4 data; US pending home sales February; Kansas City Fed index March.
Good morning and welcome to today’s Markets Live blog.
Your editor today is Bo Seo ([email protected]).
This blog is not intended as financial advice.