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Bond markets gained after Powell’s speech yesterday, which was seen as rather dovish, looking at the piling up problems in US inflation readings

Thursday News
  • Bond markets gained after Powell’s speech yesterday, which was seen as rather dovish, looking at the piling up problems in US inflation readings
  • Although the decline in yields on 10-year U.S. Treasury bonds was halted to some extent today; they are still down 11 basis points from their local highs of April 25 at 4.7% level
  • U.S. index contracts are gaining, and European benchmark quotes are pointing to a higher opening, including on the Old Continent. EURUSD is gaining 0.04% today and has returned above the 1.07 level
  • The Hang Seng rose more than 2.2%, but most indexes from APAC markets saw little volatility. The Nikkei and Korea’s KOSPI lost slightly.
  • Building permits in Australia rose 1.9% m/m vs. 3.4% forecast and -1.9% previously. Korea’s manufacturing PMI indicated 49.4 vs. 49.8 previously
  • The USDJPY has rapidly recovered much of its losses after the Bank of Japan’s likely intervention, and is now gaining almost 1%. Consumer sentiment in Japan came in weaker than forecast; the reading indicated 38.3 vs. 39.8 forecast and 39.5 previously, which the market takes as a signal that the BoJ will have arguments not to tighten policy and keep the yen weak for longer
  • Japan’s Kanda indicated that he would not give the markets information on interventions; data on them will be released at the end of the month
  • Qualcomm shares gain more than 4% after financial results. The company beat expectations for earnings per share and revenue, and issued forecasts in ranges suggesting a possible, significant improvement in the business
  • CBOT wheat contracts gain 0.6%. Press releases pointed to a fire at a port, in Odessa, Ukraine, after a Russian missile attack
  • Oil gains 0.5% today, but is still trading below $84 per barrel. NATGAS gains more than 1.5% and is approaching $2 per MMBTu. Precious metals contracts are trading down slightly, with gold losing 0.2% and falling to $2315 per ounce
  • Israel announced that the Gaza war operation will continue ‘with force’; the IDF is planning a sizable offensive in the north of the Strip. The news came moments after Netanyahu’s conversation with Secretary of State Blinken, who was said to be urging Israel toward peaceful solutions.
  • Sentiment of the cryptocurrency market remains weak. Bitcoin is trading near $57,500
  • Gundlach of DoubleLine Capital indicated that he expects one rate cut this year, but does not see a stable, sustainable path to bring U.S. inflation to the 2% target. At the same time, he sees no risk of stagflation or recession for the US economy at present
  • An earthquake measuring 4.3 on the Richter scale struck the west coast of California overnight

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