5 in 5 with ANZ
5 in 5 with ANZ
Monday: Stocks down on high bond yields
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Monday: Stocks down on high bond yields

S&P 500 and Nasdaq fall as much as 1.5% after US 10-yr hits 5.0%; BoJ intervenes to push JGB down from 10-yr high; Yen touches 150/US$; A$, NZ$ start lower; Andre Castaing on NZ's big trade deficit

Global stocks are starting the week down again thanks to high bond yields and plenty of nerves about geo-politics.

In our bonus deep-dive interview, ANZ NZ Economist Andre Castaing unpacks why New Zealand has a trade deficit of 3.5% of GDP.

5 things to know

  1. The S&P 500 closed down 1.3% and the Nasdaq ended down 1.5% after the 10-year bond yield briefly touched 5.0% late on Thursday. The A$ is opening down at 63.20c. The NZ$ is weak at 58.26c. Brent is at US$92.81, down 1%.

  2. The yen slid briefly to 150/$ on Friday, before bouncing on intervention fears. ANZ’s Head of FX Strategy Mahjabeen Zaman says Japanese authorities may tolerate the yen staying low if energy costs don’t spike as much as last year, when they did intervene.

  3. The Bank of Japan intervened on Friday to buy 10-year Japanese Government Bonds (JGBs) after its yield spiked to 0.8450%, a 10-year high. Mahjabeen says the BoJ will abandon its yield curve control programme at some point, but may retain its negative policy rate due to low wage inflation.

  4. US budget deficits are a factor driving up Treasury yields, says ANZ Group’s Chief Economist Richard Yetsenga.

  5. Richard will be watching Australian inflation data on Wednesday most closely this week.

Cheers

Bernard

PS: Look out tomorrow for a preview of Wednesday’s inflation data in Australia.

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5 in 5 with ANZ
5 in 5 with ANZ
A daily podcast hosted by Bernard Hickey that gives you the five things you need to know about the global economy and markets in under five minutes. Plus a deep dive into emerging trends and issues featuring ANZ's global team of experts.