Original insights into market moving news

Euro Market Open: Yields continue to climb amid Central Bank commentary, impacting equities

  • APAC stocks were negative on spillover selling from Wall St with risk sentiment sapped amid higher yields.
  • Ukrainian President Zelensky said Russia rejected a proposal for an Easter truce, according to Reuters.
  • European equity futures are indicative of a lower open with Eurostoxx 50 -1.8% after the cash market closed higher by 0.8% yesterday.
  • DXY hovers around the 100.50 mark, antipodeans lag, EUR and JPY lead in the G10 space.
  • Looking ahead, highlights include EZ, UK & US Flash PMIs, UK Retail Sales, Canadian Retail Sales, Speech from ECB's Lagarde, Earnings from Renault, SAP, American Express & Verizon.


  • SPX -1.44% at 4,395, NDX -1.99% at 13,720, DJIA -1.05% at 34,792, R2K -2.30% at 1,991.
  • US stocks finished lower after reversing the initial strength as bond selling took the reins.
  • Click here for a detailed summary.


  • Fed Chair Powell said the US economy is a bit more remote from the effects of the war and will feel upward inflation effects, while he added it is appropriate to move a little more quickly and a 50bps hike will be on the table for the May FOMC meeting. Powell wants to see actual progress on inflation coming down and had expected inflation would peak around this time. Powell also stated they are going to be raising rates expeditiously to more neutral and then to tighter policy if appropriate, according to Reuters.
  • Fed's Bullard (2022 voter) said the Fed is behind the curve and will not have a hard landing, while inflation expectations threaten to become unmoored. Bullard suggested the Fed isn't as far behind the curve as thought and noted that 75bps hikes have been done and the world has not come to an end, according to Reuters.
  • Fed's Daly (2024 voter) said they will likely be raising rates by 50 bps at a couple of Fed meetings and will deliberate with colleagues whether they require rate hikes of 25bps, 50bps or 75bps, according to a Yahoo Finance interview. Daly reiterated the Fed needs to take a measured pace on rate hikes and get rates up to 2.5% by year-end, while it is an open question how far rates may need to rise above 2.5%.
  • Fed’s Evans (2023 voter) is to retire in early 2023, according to the Chicago Fed.
  • Nomura forecasts the Fed to hike rates by 50bps in May and by 75bps each at the June and July meetings.




  • Ukrainian President Zelensky said Russia rejected a proposal for an Easter truce, according to Reuters.
  • US Defense Secretary Austin said they will host some counterparts in Ramstein Air Base next week on the Ukraine crisis, according to the Pentagon.


  • US State Department said it understands Ukraine's forces continue to hold their ground in Mariupol, according to Reuters.


  • Sputnik tweeted that US Congress is preparing dozens of draft bills related to new sanctions on Russia.


  • White House adviser Singh said Chinese enterprises and banks are generally cautious and avoid assisting Russia in evading sanctions. Singh added that China has a serious interest in being viewed as a responsible stakeholder on the world stage, while the US will play the long game with India and sees opportunities to help India diversify sources of energy and defence equipment, according to Reuters.


  • US said if Iran wants sanctions lifting that goes past the nuclear deal, it must address US concerns that go past that and stated that under any return to a nuclear deal, the US will aggressively use its powerful tools to counter Iran's Revolutionary Guards, according to Reuters.
  • North Korean Leader Kim exchanged letters with South Korean President Moon and thanked Moon in the letter for efforts to improve ties, according to KCNA. Furthermore, North Korean Leader Kim said joint inter-Korean agreements were unremovable, while Moon expressed hopes for a swift restart in US-North Korean talks.



  • APAC stocks were negative on spillover selling from Wall St with risk sentiment sapped amid higher yields and hawkish central bank commentary.
  • ASX 200 declined as tech suffered from higher yields and with miners subdued by OZ Mineral's weak output.
  • Nikkei 225 underperformed as the optimism from incoming relief faded on the hawkish central bank views.
  • Hang Seng and Shanghai Comp weakened amid large losses in Hong Kong's tech stocks and with sentiment not helped by the US adding another 17 firms to its SEC list for possible delisting.
  • US equity futures remained subdued after yesterday's heavy selling pressure.
  • European equity futures are indicative of a lower open with Eurostoxx 50 -1.8% after the cash market closed higher by 0.8% yesterday.


  • DXY was rangebound but held on to most of the prior day’s gains that were spurred by the risk aversion, upside in yields and hawkish Fed commentary in which both Powell and Daly added credence to the 50bps hike view for May.
  • EUR/USD languished after yesterday's brief round way trip to the 1.0900 territory which was instigated by ECB’s de Guindos.
  • GBP/USD was subdued on a 1.30 handle following yesterday's comments from BoE's Mann.
  • USD/JPY hit resistance at Thursday’s highs and retreated on reports that Japanese Finance Minister Suzuki and US Treasury Secretary Yellen likely discussed coordinated currency intervention during bilateral talks.
  • Antipodeans extended on losses due to the risk aversion and after the PBoC continued to weaken the CNY fix.
  • Japanese Finance Minister Suzuki said he confirmed with US Treasury Secretary Yellen that US and Japan will communicate closely on FX and discussed with Yellen the recent market developments, in particular, USD/JPY moves, while he explained to Yellen recent JPY declines are rapid, according to Reuters.
  • Japanese Finance Minister Suzuki and US Treasury Secretary Yellen likely discussed coordinated currency intervention during bilateral talks, according to TBS News citing a Japanese government source which noted the US side sounded as if it will consider the idea of joint FX intervention positively.
  • BoC Governor Macklem said the March inflation report shows supply disruptions are not easing and noted they will not rule anything out regarding the rate hike path, according to Reuters.


  • 10yr UST futures were pressured as yields continued to edge higher, led by the front-end, amid the aggressive Fed views and with both the 10yr yield and 30yr yields approaching closer towards 3%.
  • Bunds remained subdued by the hawkish ECB rhetoric in which de Guindos touted the potential for a July hike.
  • 10yr JGBs conformed to the lacklustre picture despite the BoJ’s special operation for unlimited JGBs which had been flagged earlier in the week and after yesterday’s operation received no takers.


  • Crude futures were indecisive but eventually weakened alongside the lacklustre mood across risk assets.
  • OPEC said oil price increase is largely because of geopolitical tensions in eastern Europe and concerns it may lead to supply shortage, according to Reuters.
  • US energy department said contracts have been awarded for 30mln bbls from SPR and scheduled to deliver 50mln bbls in May and June, according to Reuters.
  • Spot gold traded flat with overnight price action contained by the uneventful greenback.
  • Copper was subdued amid the broad risk-aversion.


  • Bitcoin prices traded relatively flat around the 40,500 level.


  • PBoC injected CNY 10bln via 7-day reverse repos with the rate at 2.10% for a net neutral daily position.
  • PBoC set USD/CNY mid-point at 6.4596 vs exp. 6.4641 (prev. 6.4098)
  • PBoC Governor Yi said COVID put more pressure on China's economy and they will provide policy support for the real economy. Yi noted monetary policy will focus on supporting small firms and sectors hit by COVID. They will keep an accommodative and steady policy, and are ready to unveil more policy steps, according to Reuters.
  • China's securities regulator urged institutional investors to buy more domestic shares during a meeting on Thursday, according to Bloomberg.
  • Shanghai government said the city's lockdown will be lifted in batches once zero-covid at community level is reached and that normal life will return soon as long as policy is adhered to, while it will conduct daily city-wide testing, according to Reuters.
  • Hong Kong government is set to scale back on the flight suspension threshold to ease restrictions that have crippled air travel, according to SCMP.
  • Japan's relief package draft stated gasoline subsidies for wholesalers will increase to JPY 35/litre from JPY 25/litre and they will submit extra budget in the current parliament session to replenish reserves and fund spending to soften impact from rising prices. It also noted they must be vigilant to the impact of JPY's declines could have on households and importers, while they will compile another comprehensive relief package after outlining the long-term economic and fiscal policy in June, according to Reuters.


  • Japanese National CPI YY (Mar) 1.2% vs. Exp. 1.2% (Prev. 0.9%)
  • Japanese National CPI Ex. Fresh Food YY (Mar) 0.8% vs. Exp. 0.8% (Prev. 0.6%)
  • Japanese National CPI Ex. Fresh Food & Energy YY (Mar) -0.7% vs. Exp. -0.8% (Prev. -1.0%)



  • BoE Governor Bailey said UK's inflation shock has more in common with the eurozone than the US. Bailey said they must ask if the series of price shocks are affecting inflation expectations and that the scale of real income shock will result in a slowdown in UK growth, while he added the inflation target is going through its most extreme test since it was made, according to Reuters.
  • UK is readying to give ministers the power to scrap the Northern Ireland Brexit trade deal, while it was also reported that PM Johnson is to order a further delay of border checks on imports from the EU, according to FT
  • UK PM Johnson answered 'yes' when asked if Chancellor Sunak will remain the Chancellor after an expected cabinet reshuffle later this year, according to Reuters.
  • ECB's Lagarde said the June meeting is key for the end of APP and potential rate path, while she noted that euro-area inflation numbers are "very high" and inflation will be more than double target at year-end, according to Reuters.
  • Ipsos-Sopra Steria French Election Poll sees Macron winning at 57.5% vs Le Pen, up from 56.5% on Wednesday.


  • UK GfK Consumer Confidence* (Apr) -38 vs. Exp. -33 (Prev. -31), GfK said UK consumers' personal finances expectations component declined to a record low.