Headlines:
- USD/JPY retreats lower as bond yields erase early advance
- Fed's Barkin: I'm very supportive of what we did in December
- Equities encounter a more push and pull start to the day
- Eurozone January Sentix investor confidence 14.9 vs 12.0 expected
- SNB total sight deposits w.e. 7 January CHF 724.6 bn vs CHF 722.8 bn prior
- Moody's downgrades Shimao from Ba3 to B2, rating remains on review for further downgrade
- Tianjian suspends all travel businesses by local agents effective immediately
- The not-so-silent elephant in the room
Markets:
- JPY leads, EUR and CHF lag on the day
- European equities lower; S&P 500 futures down 0.6%
- US 10-year yields up 0.7 bps to 1.776%
- Gold up 0.1% to $1,797.22
- WTI down 0.6% to $78.42
- Bitcoin down 1.5% to $41,278
It was a quiet session for the most part though there were a couple of key themes to take note of.
Treasury yields initially advanced higher, with 10-year yields hitting a two-year high just above 1.80% before easing slightly to around 1.77%. That saw stocks pull back initially with Nasdaq futures falling 0.3% before paring back that loss.
But as we head towards US trading, tech is once again starting to lag with Nasdaq futures slumping by 1% now.
In turn, that has kept the dollar and yen in good standing to start the new week. EUR/USD is down 0.4% to 1.1315 in a gradual fall from around 1.1330-40 earlier. Meanwhile, USD/JPY has fallen from 115.60 to 115.20 during the session.
Commodity currencies have also seen their early gains pared with USD/CAD up from 1.2610 to 1.2650 while AUD/USD is down from 0.7200 to 0.7175-80 levels at the moment.
Elsewhere, oil is also suffering amid the latest turn with price now down 0.7% to $78.33 after being as high as $79.45.
The mood music continues to center around rate hike fears, rising bond yields, but let's not forget that China is arguably the most critical factor to consider - even if it is one that is the least talked about.
