The dollar and US bonds remain high awaiting inflation data

The asian bags maximums of 15 months and the dollar remains firm awaiting US inflation datawhile Japanese bonds are pressured by the central bank’s withdrawal from its bond-buying program.

The US, UK and European stock futures remain stable, with the FTSE and the European STOXX 600 set to open near record levels.

MSCI’s broadest index of Asia-Pacific shares, which does not include Japan, hits its highest since early 2023 in morning trading, before stabilizing again. The Japanese Nikkei advances slightly.

Japanese debt

The performance of the 10-year Japanese public debt rises one basis point to 0.95%, the highest yield since November, and the Japanese five-year yield reached 0.555%, the highest since 2011.

However, the difference with US yields still hundreds of basis points and broad enough to keep the fragile yen under pressure.

A survey released Monday by the New York Fed showed that Americans see inflation within a year at 3.3%above what they saw a month earlier, and US producer price figures will be closely watched later on Tuesday.

This week, the focus will be mainly on Wednesday’s actual US CPI numbers, to see if some upside surprises in the first quarter were a blip or a worrying trend. The core CPI is expected to slow from 3.8% annually in March to 3.6% in April.

Futures and inflation

“If a fourth consecutive upside surprise were to occur, it would likely influence the path of the future short term interest rates“said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore.

“If inflation does not continue on the path of disinflation, we fear that official interest rates have not peaked in this cycle,” he stated.

Also on Tuesday, Alibaba is expected to report results and that the Chairman of the Federal Reserve, Jerome Powellspeak at 1400 GMT.

Uber announced a agreement of US$1,250 million to take over Delivery Hero’s Foodpanda business in Taiwan. Anglo American has presented a strategy update that includes exploring options for its steelmaking coal, nickel and platinum businesses, while fending off a takeover from BHP.

China: Hang Seng rose

In China, Hong Kong’s Hang Seng Index has risen 30% from January lows and has rallied almost 20% in a monththanks to the constant flow of money from mainland Chinese buyers.

Investors have welcomed the news that China to issue one trillion yuan in special bonds as a harbinger of spending, while weak lending data also shows that monetary easing is reaching its limit. Last week’s Hang Seng volumes were the highest in 17 months.

“Some of my clients ask me every day what to buy, when to buy, because they still have an underweight position in Hong Kong stocks,” said Steven Leung, managing director at brokerage UOB Kay Hian in Hong Kong. And he said that “this situation may continue for some time.”

U.S. Treasuries held steady in Asian markets to leave 10-year yields at 4.49% and two-year yields at 4.86%.

foreign exchange market

In the foreign exchange market, nerves and the survey on inflation expectations were enough to prevent the fall of the dollar. He dollar/yen It reached its highest level since the beginning of the month, when traders believed that the Japanese authorities were intervening to buy yen.

He and in It reached 156.4 per dollar. He euro remained stable at $1.0786 and the Australian and New Zealand dollars They remained in recent ranges, the Australian at 0.6606 and the “kiwi” (New Zealand currency) at 0.6015.

Australia expected to announce budget surplus late Tuesday, although during the day the markets focused on business news. Shares in New Zealand construction supplier Fletcher Building fell to their lowest level in 21 years as it warned of a decline in home sales.

Oil and gold remained stable, with the Brent crude oil futures at $83.40 per barrel and spot gold at $2,339 per ounce.