Analysts at ANZ Bank New Zealand Limited offered a market wrap noting that the volatility in the Japanese bond market fed into negative sentiment towards fixed income markets in the US and Europe overnight.
Key Quotes:
“The yield on the US 10-year note rose 7bp to 2.96% and the benchmark German bund yield lifted 3.5bp to 0.4%. There was an absence of any meaningful data or speeches overnight to drive markets.”
“Markets are awaiting policy updates from the ECB this Thursday and the Fed and BoJ next week.”
“More immediately the focus will be on the provisional July PMI on Tuesday and the Trump-Juncker meeting about trade on Wednesday.”
“Growth and trade dynamics remain the key drivers of short-term sentiment so FX has the potential to be more active in coming days than it was overnight, when summer holiday mode was quite apparent.”
“Equities were flat to down: the S&P 500 is unchanged at the time of writing, while earlier the DAX closed down 0.1% and the FTSE was off 0.3%. Oil fell late in the session on a strengthening USD, with WTI down 0.9% at the time of writing at USD67.66/bbl. Gold eased 0.4% to USD1224.6/oz.”
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