Thursday, April 23, 2015

Bond yields jump as Bill Gross says sell Bunds

•     Bond yields jump as Bill Gross says sell Bunds
–    Tweeted that shorting Bunds was the trade of a lifetime; Bund, Treasury yields higher
–    Higher core market yields likely to pressure EM currencies, gold

•     CHF worst-performing currency on extension of negative rates
–    Some public funds that were exempted from negative rates now must pay them
–    Move was for equality, not policy; not really significant
–    I expect stronger CHF trend to resume as the surprise fades

•     NZD weakens on comments on monetary policy
–    Monetary policy to remain accommodative; currency rise is “unwelcome”
–    I still expect AUD/NZD parity soon

•     China, Japan PMIs fall
–    China HSBC PMI expected to be unchanged, but sinks lower into below-50 territory
–    Japan PMI below 50 for first time in nearly 1 year
–    Weakness in manufacturing exporters = bad for EM countries, commodity currencies

•     Today:
–    Eurozone: PMIs expected to improve, may boost EUR
–    UK:  Retail sales forecast to decelerate a bit, could cause profit-taking in GBP

–    US: Markit PMI; new home sales for March; initial jobless claims

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