A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.
A double dose of the U.S. Treasuries and dollar ‘pain trade’ looks set to put Asian markets on the defensive on Wednesday, with investors also bracing for South Korean inflation figures and an expected interest rate hike from the Bank of Thailand.
The slump in U.S. bonds on Tuesday pushed the 10-year yield above 4.0 per cent, and the 30-year yield above 4.10 per cent for the first time since November, lifting the dollar and sapping any risk appetite investors might have had on the first day of the new month.
Several indicators, from big Wall Street banks’ client surveys to futures market positioning data, show investors are not positioned for that. They are heavily ‘long’ Treasuries and ‘short’ dollars – moves like Tuesday’s will hurt.
They will also add to the volatility and uncertainty…
