Global stocks sell-off accelerated this morning, one day ahead of the deadline for the US to raise tariffs on more Chinese imports after President Trump said China “broke the deal” at a rally yesterday evening. China also claimed that it would take necessary countermeasures if the US were to follow through on imposing higher tariffs tomorrow. Treasuriesrallied as investors sought haven assets while the yuan fell to its weakest since January. The rally in Treasuries came after yesterday’s 10-Year notes auction where we saw the weakest demand for the benchmark in a decade. Elsewhere, geopolitical tension intensified in Asia as North Korea launched another round of short-range missiles less than a week after testing them. WTI crude continued to trade below $62 a barrel this morning.
The headline PPI in April declined to 0.20% below consensus of 0.30% following 0.60% in March. The core also dropped to 0.10% from 0.30% prior vs. 0.20% consensus. However, YoY change remained unchanged for both the headline and the core at 2.20% and 2.40%, respectively. Trade deficit widened in March to $50.00 billion from a revised prior of $49.30 billion vs. $50.10 billion consensus. Initial Jobless Claims slightly inched lower to 228k from 230k prior vs. 220k consensus but Continuing Claims climbed to 1684k above 1670k consensus following 1671k prior. Bloomberg Consumer Comfort fell to 59.80 from 60.40 prior and lastly, Wholesale Inventories in March fell to -0.10% from 0.00% prior. Later today, the US Treasury is scheduled to auction off $50 billion of 4-week bills and $35 billion of 8-week bills at 8:30 AM (PT), and $19 billion of 30-year bonds at 10:00 AM (PT).
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Global stocks sell-off accelerated this morning, one day ahead of the deadline for the US to raise tariffs on more Chinese imports after President Trump said China “broke the deal” at a rally yesterday evening. China also claimed that it would take necessary countermeasures if the US were to follow through on imposing higher tariffs tomorrow. Treasuries rallied as investors sought haven assets while the yuan fell to its weakest since January. The rally in Treasuries came after yesterday’s 10-Year notes auction where we saw the weakest demand for the benchmark in a decade. Elsewhere, geopolitical tension intensified in Asia as North Korea launched another round of short-range missiles less than a week after testing them. WTI crude continued to trade below $62 a barrel this morning.
The headline PPI in April declined to 0.20% below consensus of 0.30% following 0.60% in March. The core also dropped to 0.10% from 0.30% prior vs. 0.20% consensus. However, YoY change remained unchanged for both the headline and the core at 2.20% and 2.40%, respectively. Trade deficit widened in March to $50.00 billion from a revised prior of $49.30 billion vs. $50.10 billion consensus. Initial Jobless Claims slightly inched lower to 228k from 230k prior vs. 220k consensus but Continuing Claims climbed to 1684k above 1670k consensus following 1671k prior. Bloomberg Consumer Comfort fell to 59.80 from 60.40 prior and lastly, Wholesale Inventories in March fell to -0.10% from 0.00% prior. Later today, the US Treasury is scheduled to auction off $50 billion of 4-week bills and $35 billion of 8-week bills at 8:30 AM (PT), and $19 billion of 30-year bonds at 10:00 AM (PT).
The curve has bull-steepened with UST 10-Year yield down 5.54 bps.