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Jens Peter Sørensen
Danske Bank A/S
Market Movers
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In Europe focus will be on the Bank of England meeting and the final inflation data for Euroland. Bank of England is expected to be on hold given the focus on the upcoming Brexit vote.
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In the US we have CPI data and a couple of Fed speeches. The CPI data are becoming more important as Fed’s Yellen has previously stated that she needs to see that the rise in inflation ‘proves durable’.
Selected Market News
The positive sentiment in the US equity market continued yesterday on the back of the better-than-expected trade data from China and the Q1 results from JP Morgan beating market expectations. So despite weaker-than-expected retail sales, the equity market continued its positive streak and is now at its highest level so far this year.
US Treasury bonds had a mixed day. The yield on the 10Y Treasuries fell a few bp on the back of a very solid demand at the auction yesterday. The demand is driven by foreign investors looking for higher yielding alternatives to Bunds and JGBs. Today, the Treasury continues the auctions and is selling in the 30Y segment. Given the strong demand at the French 20Y and 50Y syndicated deals, there seems to be ample demand for the long end of the AAA-AA rated yield curves.
Asian equity markets follow the positive sentiment from the US and received support from a weaker JPY as well as an unexpected easing of monetary policy in Singapore this morning. The central bank in Singapore announced that it will no longer seek an appreciation of the local currency against a basket of currencies. Most forecasters had expected no change in policy.
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