From pre-Fed jitters to kiwi milk prices, here’s your super-fast rundown at what’s been happening, and what to look out for in the Asian trading day:
TREASURIES RISE BEFORE FED
Treasuries took center stage in New York, with 10-year yields falling to a 2 1/2-week low as the Fed bunkered down in Washington. A bigger-than-forecast drop in housing starts added to concerns about the U.S. recovery, and the break-even rate, a key indicator of the bond market’s expectations for inflation, sank a ninth day, the longest run of losses since 2008. Oil’s not helping the outlook for prices, with WTI crude inching back toward a bear market, trading at a six-year low before today’s update on U.S. stockpiles. Analysts say supplies, already at a more than 30-year high, probably increased again last week.
STOCKS DIAL IT BACK
U.S. and Europe reversed some of Monday’s exuberance amid the slump in oil and signs German investors aren’t quite as confident as we thought they were. While up for a fifth straight month, the ZEW survey of investor expectations came in below estimates for February as ongoing uncertainty over Greece took a bit of the sheen off the ECB’s QE plans. The DAX slipped 1.5 percent from a record. The S&P 500 ended down 0.33 percent as declines in energy and mining stocks overshadowed gains for the likes of Apple and Facebook. The Nasdaq Composite was up.
MILK PRICES ARE FALLING AGAIN
The kiwi dollar got hit after milk powder prices slipped in the global dairy auction held overnight. After tumbling more than 50 percent in 2014 amid slackening demand from China, prices looked to be staging a rebound earlier this year as drought in New Zealand, the world’s biggest dairy exporter, crimped global supplies. No more, powder prices were down for a second straight auction, damping prospects milk giant Fonterra will be able to pad out its payout to farmers.
Here’s a chart of whole milk powder prices over the last 5 years.
CHINA HOUSE PRICES, MALAYSIA CPI
China reports on property prices around 9:30 a.m. in Beijing, following a record drop in new-home prices in January. We’ll also get an update on Japanese trade and a final read on February machinery tool orders. Asian stock futures are presenting a mixed picture with Hong Kong and China looking at gains while Nikkei 225 contracts are down 0.3 percent in Osaka. Malaysia is tipped to report a pullback in inflation today. That could stoke expectations of a rate cut with Bank Negara Malaysia one of the few Asian central banks yet to join the easing club.
ISRAEL’S ELECTION LIMBO
Israel’s election is too close to call, with Prime Minister Benjamin Netanyahu’s Likud party pretty much tied with the opposition in three TV exit polls. The lack of a clear majority may thrust lawmakers into weeks of negotiations over coalitions, with Netanyahu making a play for the support of smaller parties. The shekel’s up 0.9 percent the past two days.
©2015 Bloomberg News