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Good morning, and happy Groundhog Day*. The dollar is strengthening and Treasury yields are rising as diplomatic efforts to reopen the Strait of Hormuz falter once again. Iran and the United States said last week they had reached a tentative deal to halt the war, but nothing has been signed and events on the ground moved in the opposite direction overnight: Iranian missiles damaged Kuwait’s airport...
• Holding on. Modest financial market moves. US equities & oil tick up. NZD a bit softer. AUD edges up slightly & outperforms on the crosses.• Data flow. More signs US jobs market is holding up. EZ inflation quickens, raising odds of an ECB rate hike next week. AU Q1 GDP released today.
Global Trends
A fairly quiet 24hrs across markets with modest net moves coming through across most asset...
Treasury yields and the dollar are retreating from yesterday’s highs after Hezbollah and Israel agreed to temporarily halt cross-border fighting, giving Iranian officials cause to return to the bargaining table. Oil prices had posted their sharpest one-day surge in a month after Tehran said it was abandoning talks amid an intensifying Israeli assault on Lebanon, reviving supply fears that had...
• Headline noise. Conflicting Middle East news generated a few bursts of volatility. US bond yields & USD ticked up. NZD & AUD lost a bit of ground.• Macro events. Eurozone CPI tonight. US non-farm payrolls due later this week. Australian Q1 GDP out on Wednesday. RBA Gov. Bullock also speaks (Thurs).
Global Trends
Middle East-related headlines knocked markets around a little overnight....
The US Treasury market has long served as the world’s financial anchor—deep, liquid and reliably stable. That reputation for placidity is becoming harder to sustain*. America is borrowing at a pace that would have seemed extraordinary a generation ago, and the buyers who once absorbed that paper without blinking are quietly stepping away.
The scale of the fiscal expansion is astonishing. Publicly...
Good morning. Equities look set to extend May’s advance at this morning’s open, even as the dollar and Treasury yields climb amid another round of escalatory strikes in the Middle East. Overnight, America hit radar and missile sites in Iran, and Tehran responded with attacks on Kuwait. President Trump said he was “in no hurry” to agree to a deal that might reopen the Strait of Hormuz, warning...