US stocks staged a broad based recovery overnight on reports that Trump would delay the decision on auto tariffs, due May 18, by up to 6 months. Though, strength of recovery was relatively limited. More importantly, 10-year yield still closed down -0.0040 at 2.379, breaking 2.4 handle firmly. With 3-month yield closed at 2.404, this most crucial part of yield curve, 3-month to 10-yield, is inverted. Asian markets are mixed with mild recovery in China and Hong Kong stocks, but Nikkei is clearly down despite the auto tariff news.

In the currency markets, Australian and New Zealand Dollar are the weakest ones for today. Aussie was somewhat weighed down by unexpected rise in unemployment rate to 8-month high of 5.2%. But we’d like to emphasize that was due to rise in participation rate to record high of 65.8%. It’s healthy in a strong labor market. Canadian Dollar is the third weakest for today. On the other hand, weak treasury yields continue to support Yen as strongest, while Euro and Sterling recover.

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For the week, Yen and Swiss Franc remain the strongest one on free fall in major global treasury yields. Dollar remains the third strongest. Sterling is the weakest one on never ending Brexit impasse. Australian and New Zealand Dollar are the next weakest.

In Asia, currently:

  • Nikkei is down -0.67%.
  • Hong Kong HSI is up 0.24%.
  • China Shanghai SSE is up 0.28%.
  • Singapore Strait Times is up 0.05%.
  • Japan 10-year JGB yield is down -0.0097 at -0.061.

Overnight:

  • DOW rose 0.45%.
  • S&P 500 rose 0.58%.
  • NASDAQ rose 1.13%.
  • 10-year yield dropped -0.040 to 2.379.

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