- PBOC cuts forex RRR by 1 percentage point.
- UK CBI Business Optimism: -34 (Forecast -15, Previous -9)
- China's cabinet announce more measures to promote consumption potential
- Morgan Stanley Revises Down Euro Zone 2022 GDP Fcast to 2.7% From 3% Earlier
- Euro Zone Construction Output for February 1.9% (Previous 3.94%)
- German government to hike 2022 inflation forecast to 6.1% - document - Reuters
- Yuan getting fried. Lowest in a year as sentiment tanks on renewed Chinese lockdown fears
- Ifo Says German Business Morale Rises in April
- Blood on the streets of Europe as major bourses start the week with a punch in the face.
- Chinese commodities are feeling heavy on fresh lockdowns: Coal down 5% Iron Ore plunges 9%
- Beijing restricts movement in one area of Chaoyang district
Markets:
- Gold down 34 point $1895
- US 10-year yields down 9 bps to 2.81%
- WTI crude down $4.58 to $97.54
- JPY leads, AUD lags
- S&P 500 futures down 25 points
Adam's commentary:
"Increasing covid cases in China along with a new set of cases in Beijing have the market worried about supply chains and global growth. The yuan is tumbling at the worst pace since August 2015 and there's no sign of anything but more lockdowns. The PBOC lowered the FX RRR by 100 bps to 8% from 9% in an effort to stem the drop in the currency but there's been little market reaction.
That reality is running into the reality that global central bankers are increasingly hawkish and growth is getting hit on both sides.
Signs continue to mount of global deleveraging and that will be tough to stop.
In FX, the breakdown in the pound continues as it shed another 100 pips today. Elsewhere, the early drop in commodity currencies has stalled. Some of that is the give-and-take between risk aversion and a fresh fall in USD yields. Even with all that, the yen is struggling to hold a bid against the US dollar.
