Risk aversion extended from US to Asian session today. It started off overnight after the all-round dovish turn of ECB which triggered steep decline in stocks as well as treasury yields. Asian markets picked up and are sent further lower by terrible trade data from China. In short, China’s exports contracted steeply by -20.7% yoy in February, largest decline since 2016. Trade surplus shrank to just USD 4.1B. The data highlights the “tough struggle” that Chinese Premier Li Keqiang mentioned earlier. Difficult export environment is a primary reason for lowering growth target to 6.0-6.5%, which lower bound is slowest in three decades.
Adding to negative sentiments, Citic Securities surprisingly advised clients to sell shares of People’s Insurance Company of China saying it’s “significantly overvalued”. Some speculate that such a sell rating must be have greenlight from regulators. That is, the Chinese government could be seeing recent surge in stocks as overheating and prefer to cool it down into a slow bull market. China Shanghai SSE is currently down -3.09% but stays above 3000 handle nevertheless.
In the currency markets, Yen is overwhelmingly the biggest winner for today and the week, followed by Swiss Franc. Global treasury yields staged a u-turn this week with German 10-year yield back at 0.067, after hitting as high as 0.21 earlier in the week. US 10 year-yield also lost 2.7 handle again. Japan 10-year JGB yield only turned positive for a brief little while. As for today, Australian Dollar is the worst performing one, followed by Dollar and Canadian. Focus will turn to job data from both US and Canada later in the day.
In Asia:
- Nikkei dropped -2.01%.
- Hong Kong HSI is down -1.62%.
- China Shanghai SSE is down -3.07%.
- Singapore Strait Times is down -0.81%.
- Japan 10-year JGB yield is down -0.0254 at 0.035.
Overnight:
- DOW dropped -0.78%.
- S&P 500 dropped -0.81%.
- NASDAQ dropped 01.13%.
- 10-year yield dropped -0.056 to 2.636.
- 30-year yield dropped -0.046 to 3.025, still above 3.0 handle
