Dear clients,
The lull in bond sales lasted until Friday, but is unlikely to persist until the end of the day as investors await US employment data, which could bolster the case for keeping interest rates high for some time.
Oil’s transition from a sharp rise to a fall also provided a respite, with Brent crude futures at $84.50 a barrel, about $13, or 13.5%, cheaper than last week’s 11-month high.
MSCI’s index of Asia-Pacific shares rose 0.9%. Tokyo’s Nikkei (.N225) index was unchanged and currency markets were flat, although the dollar began a record 12th week of gains due to the bond slump.
The ten-year US Treasury yield held mercifully at 4.72% during the Asian session, but it climbed 55 basis points in the course of the five-week sell-off, weighing on bond markets and risk appetite globally.
However, no one was betting big until the release of US non-farm payrolls data at 12:30 GMT.
Another batch of bond sell-offs is likely to see the dollar continue its week-long winning streak, which is already the longest in history against the euro. The dollar index has risen for 12 consecutive weeks, repeating a streak that lasted from July to October 2014.
The rise has taken the euro at $1.0542 near an 11-month low and sterling near a seven-month trough. The dollar index was unchanged at 106.4 on Friday.
Surprisingly, only the beleaguered yen showed significant struggle as a sudden surge in the Japanese currency in London on Tuesday afternoon sparked speculation of government intervention.
Japanese money market data did not reveal any anomalies that could accompany intervention. However, the movement was notable enough to make traders wary.
The yen exchange rate was last seen remaining stable at 148.5 per dollar. Gold also remained steady at $1,822 an ounce after nine days of losses caused by rising global bond yields.
