Headlines:
- Dollar builds on hawkish Fed tone from yesterday
- US Treasury 30-year yields at its highest since October last year
- US December Challenger layoffs 19.1k vs 14.9k prior
- Japan to decide on virus measures tomorrow
- Eurozone November PPI +1.8% vs +1.2% m/m expected
- UK December final services PMI 53.6 vs 53.2 prelim
- Shimao turmoil an ominous sign for China's property sector
- Germany November factory orders +3.7% vs +2.1% m/m expected
Markets:
- JPY leads, AUD lags on the day
- European equities lower; S&P 500 futures down 0.1%
- US 10-year yields up 3.9 bps to 1.742%
- Gold down 0.9% to $1,794.47
- WTI up 1.9% to $79.31
- Bitcoin down 1.7% to $42,890
The hawkish Fed tone after the FOMC meeting minutes release yesterday continues to reverberate.
Bond yields are higher, stocks are weaker, and the dollar is holding up - keeping firmer mostly against the commodity currencies.
There were hints of a more risk-off mood earlier in the day but that has abated a little but there are still some cautious signs. European indices are down over 1% on the day, catching up to Wall Street losses yesterday. Meanwhile, US futures are mixed with tech leading the downside. S&P 500 futures are down 0.1%, Nasdaq futures down 0.7%, but Dow futures are up 0.2%.
Elsewhere, the selloff in Treasuries is continuing with 10-year yields approaching key resistance around 1.75% and 30-year yields climbing to its highest since October last year above 2.15%.
In FX, the dollar is advancing against the commodity currencies though gains have eased a touch. AUD/USD was down to a low of 0.7145 but is now holding around 0.7170, still down 0.7% though. Meanwhile, USD/JPY is marked lower amid the uneasiness in risk sentiment as the pair slips from 115.90 to 115.70 earlier.
In the commodities space, gold is marked down by almost 1% to test its 100-day moving average at $1,792.60. This comes amid the backdrop of higher yields. Elsewhere, oil was initially lower on the day amid the risk retreat but has rebounded strongly to be up by almost 2% above $79.
