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Stocks

• Stocks are slightly firmer ahead of North American trading.
• European indices are slightly higher, while US futures are slightly higher.
• There isn’t much going on in the session, as risk tones are seen fluctuating slightly in European morning trade.
• Equities were little changed earlier but are now trending slightly higher, with European indices up 0.4 percent to 0.5 percent and US futures up 0.2 percent on the day. Because there hasn’t been much for traders and investors to work with, the changes have been minor.
• The bond selloff appears to be cooling, but Treasury yields remain higher for the time being. 10-year yields have risen 2.2 basis points to 2.363 percent.
• In FX, there are only minor changes, but the franc and yen are the two gainers for the day. USD/CHF is down 0.4 percent to 0.9260 at session lows, while USD/JPY is still hovering around 121.50-70 after falling to 121.20 in late Asia trading. The latter peaked at 122.43 early on and is currently down 0.6 percent as Japanese officials attempted to devalue the currency.

China

·      Sunac China is the latest name to succumb to the debt crisis

·      China’s third largest developer is unable to make two bond payments due to liquidity constraints Due to liquidity constraints, the company says it will be unable to make payments on two bonds due in early April, and that it will be discussing repayment extensions with creditors soon.

·      The domino effect has been ongoing since the Evergrande saga, and it will continue to put pressure on the Chinese economy for the rest of the year.

UK

·      UK February retail sales -0.3 percent vs +0.6 percent m/m expected. Latest ONS data – 25 March 2022, Prior +1.9 percent, Retail sales +7.0 percent vs +7.8 percent y/y expected.

·      Retail sales (excluding fuel) -0.7% vs. +0.5% expected m/m • Prior +1.7%

·      Retail sales (excluding fuel) +4.6 percent vs +5.6 percent expected y/y • Prior +7.2 percent

·      Retail sales in the United Kingdom have been hit and miss as consumer activity slows in February. Non-store retail sales fell 4.8 percent month on month, while food store sales fell 0.2 percent month on month. According to the details, some of the drop in the former may be due to affordability concerns. This suggests that the cost-of-living crisis is becoming more visible as inflation takes hold

In Europe today, UK retail sales and the German Ifo business survey are on the agenda. A couple of releases to keep things moving.

Risk tones remain firmer than yesterday, with US futures pointing slightly higher ahead of European trading. After the early-week bond selloff, the mood is more measured now, though Treasury yields are still ticking higher on the day. 2-year yields have risen by more than 3 basis points to near 2.16 percent, while 10-year yields have risen by more than 2 basis points to just above 2.36 percent.

In forex, yen pairs are still the place to be, despite a decent pullback due to profit-taking and some light jawboning by Japanese officials earlier. USD/JPY peaked at 122.43 but has since fallen to 121.45, just off lows of 121.20. Meanwhile, the dollar maintains a bit more of a back-and-forth action against the rest of the major currency bloc, though the Australian dollar, in particular, is looking buoyant on a break above 0.7500.

Looking ahead, economic data releases are unlikely to provide much, so expect the ebb and flow to continue to dictate trading sentiment for the foreseeable future.