Rates as of 0500 GMT
A generally riskon day as US economic data showed the recovery continuing. Jobless claims came in better than expected, with initial claims falling by 51k, more than double the 27k decline that was expected. The US Institute of Supply Management ISM manufacturing purchasing managers index was roughly in line with expectations, coming in at 60.6 vs 60.9 expected. The strong economic data pushed US stocks higher for the seventh day in a row as investors continued to buy the reopening theme. Oil was up. Yet US bond yields fell slightly 10yr 1 bp.
It appears that fears about the virus disrupting the economy are fading again. In Europe, the Eurostoxx 600 travel leisure index outperformed the overall market nicely yesterday, while in the US, airlines and hotels, restaurants, leisure both outperformed too.
In FX, the USD continued to gain and JPY continued to lose ground.
What surprised me though was that in this context, the commodity currencies also lost ground. They should be the FX markets equivalent of the airline industry, no? Especially CAD being down while oil was up 1.4. Canada was on holiday yesterday maybe that has something to do with it. AUD is performing particularly badly as the seventh city in the country went into lockdown. Nearly half the population more than 12mn people are under stayathome orders now, giving Australia one of the most stringent antivirus regimes around.
They are acting out of an abundance of…