· Market took a huge hit last night and across all asset classes, things took a dip.
· There was a terrorist attack in US where two bombs went off in the Boston Marathon. So far from the news 2 have died and numerous injured. The bombs were believed to be concealed in two small packages and from the reports so far there are more packages that are currently being defused. This have rocked the market and the development in Boston next few days will be closely monitored and could affect markets.
· With so much negative news and risk off mood, USDMYR also traded back up to 3.0500 and we reckon range for today is at 3.0200-3.0700 with much volatility but little volume.
· To top it up, yesterday during Asian time, China’s slower than anticipated start to the year has took a big swipe off commodities for a second day with oil falling 4% to $87.75 in New York (-6.23% since Friday), Gold down a whopping 16% since Friday currently trading at USD1380/oz, copper fell as much as 4.47% but recovered to -2.4% last and silver down 12% and falling.
· To make matters worse, more bad data from the USA last night compounded recent poor jobs, retail sales and manufacturing indices. The Empire manufacturing index fell to 3.05 from 9.24, the survey was at 7. The NAHB housing index fell for a second month to 42 from 44, the first consecutive drop since early 2011.
· US 10yr yields are down 4bps to 1.68%, the lowest close since 11th December and curves flattening across all maturities.
· How can we not also share on USDJPY, everyone was looking for the pair to power past 100.00 but of course as expected it didn’t and it tracked all the way back to 95.80 yesterday. We reckon with the G10 meeting this weekend and the current swing, USDJPY could face more downside pressure.
· Europe is still Europe, stock markets missed most of the brutality on the NYSE but fell 0.33% anyway with only moderate moves in sovereign yields.
· Moody’s commented on Cyprus saying the solvency issues are still unaddressed (but then so are Greece, Portugal, Ireland and Spain?), and they also said Spanish real estate will suffer for another 5 years due to unemployment, credit constraints and poor growth.
· In Italy, news that the parliament will meet on Thursday to elect a new President. They will need a 2/3rds majority, I doubt very much that they can get it at this stage.
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