UPDATE 2: And there go the precious metals... with their ubiquitous 'opening' slamdown...
[8]
UPDATE 1: US Treasuries are now rallying urgently back from the edge as European markets awake (and the EUR slammed)... what else would one expect on ECB/BoE day?
The exuberance of the US day-session has flopped into the evening and Asian stocks, buoyed by a plunging JPY and the carry-mob is on a charge once again. USDJPY just broke back over 100.00 for the first time since July 25th managing to lift the Nikkei almost 1000 points since Friday's close. Most Asian stocks are higher (India +2.6%) but FX is more varied with the Rupiah, Baht, and Ringgit lower still as the Rupee strengthens modestly (as forwards compress too). The USD is bid against the majors with EUR cracking lower. The tale of the night though is US Treasuries which have slammed higher in yield once again. The spread between 5Y Treasuries and 30Y has plunged over 30bps in the last month and now hovers just above 200bps - its lowest in 13 months. This bear-flattening (belly and short-end is underperforming notably overnight) has driven the market's implied 10Y rate for year-end over 3% for the first time since July 2011. The entire forward curve of the Treasury complex is repricing higher in rates as 'absolute' NIM expectations drop.
JPY has been dropping rapidly recently with USDJPY up 300 pips in the last few days..
[9]
Which managed to 'fund' almost 1000 Nikkei 225 points since Friday's close...
[10]
Still think financials are all about the NIM? think again... here is 3m forward 10Y rates vs XLF... jumping over 3% as the front-end underperforms...
[11]
But its not just the forward curve, the spread between longer-dated and mid-dated Treasuries has collapsed...
[12]
So there we have it, McCain's moar war has fixed Asia, broken bonds, and ramped the USD...
And remember its ECB/BoE day in Europe... and the EUR is trading like penny stock... as European markets open and push Treasury yields back lower once again...
[13]
Charts: Bloomberg