ECONOMY
On Monday , Asian shares as well as U.S. stock futures rose after the United States dropped its threat to impose tariffs on Mexico in a deal to combat illegal migration from Central America, while weak U.S. jobs data raised hopes for U.S. interest rate cuts.
The Fed funds rate futures are still pricing in more than two 25-basis point rate cuts by the end of this year even after their retreat early on Monday following the U.S.-Mexico deal.
Japan’s economy grew slightly faster than initially estimated in the first quarter, thanks to stronger capital spending, but global trade tensions remain a drag on overall growth for the export-reliant nation. The economy grew an annualized 2.2% in January-March, stronger than economists’ forecast for 2.1% annualized growth.
Reserve Bank of India Governor Shaktikanta Das said the central bank would closely monitor the health of non-banking financial companies (NBFCs) and it would not hesitate to take corrective measures, if needed, to address issues in the shadow banking sector.
A U.S. Labor Department report showed nonfarm payrolls increased by 75,000 jobs last month, much smaller than the 185,000 additions estimated by economists in a Reuters poll, suggesting the loss of momentum in economic activity was spreading to the labor market.
World Bank said the banking sector in Russia had a lower adequacy ratio and a higher ratio of non-performing loans than other emerging market countries.Russia’s central bank has shut hundreds of lenders in the past few years and rescued several major banks at a cost of tens of billions of dollars.
BONDS
U.S. Treasuries futures dropped 13/32 in price while U.S. interest rate futures gave back gains made after Friday’s soft payroll data.
The 10-year Treasury note yield +1.49% fell 4 basis points to 2.085%, its lowest since September 2017. The benchmark maturity declined 5.4 basis points this week.
The 2-year note yield +1.50% fell 2.9 basis points to 1.853%, extending its week-long drop to 8.4 basis points.
The 30-year bond yield +0.62% tumbled 5.2 basis points to 2.569%, leaving it mostly unchanged for the week.
CURRENCY
The Mexican peso jumped more than 1.5 percent in early Monday trade to 19.2895 on the dollar after the migration deal between U.S. and Mexican.
The euro was little changed at $1.1314 near a 2-1/2-month high of $1.1348 touched on Friday. The common currency held firm near five-month highs against sterling at 88.965 pence.
The offshore Chinese yuan traded at 6.9405 yuan per dollar, having hit a seven-month low of 6.9616 on Friday.
COMMODITY
On Monday, Oil prices rose after Saudi Arabia said producer club OPEC and Russia were likely to keep withholding supplies, and in relief that the United States and Mexico averted a trade war that would have damaged the global economy.
Front-month Brent crude futures, were at $63.48 at 9.16 ET, 19 cents, or 0.30%, above Friday’s close. U.S. West Texas Intermediate crude futures were at $54.20 per barrel, 21 cents, or 0.398%, above their last settlement.
Gold slipped 0.87% trading at $1,334 per ounce, near a major resistance around $1,350.
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