Asian Markets Mixed as Bond Yields inch Higher

Asian and Pacific financial markets put in a mixed performance this morning as investors digested a plethora of economic data and corporate earnings. Bond also inched lower, pushing rates up.

We are seeing higher trading volumes across the region which suggests a rotation out of bonds and into stocks. Bond yields across the region were higher continuing a selloff sparked by a better than expected gross domestic product print out of the United Kingdom yesterday. Some of these profits are shifting into equities. There are also comments from the Bank of Japan saying that they are not very likely to increase their quantitative easing program anytime in the near future.

During Asian trading hours, the US 10 year Treasure were up to a yield of 1.85 percent. This is a five month high and the 10 year Japanese Government Bond (JGB) yield was up to 0.044 percent.

Looking at the regional equity markets, the Australian S&P ASX 200 was down nearly a half percent. There were losses in the financials sub-index, down 0.5 percent. The energy sub-index rose 1.05 percent and he materials sector was up 0.74 percent. These mitigated losses.

In Japan the Nikkei 224 was up 0.52 percent. This come despite weak economic data. A weaker yen supported Japan’s exporters. The USD/JPY Forex market broke past the ¥105handle after London’s markets close thanks to a stronger dollar. This Forex market was trading at 105.10 as of 11 am HK time. This is a key level, which the yen might not be able to sustain. In order to see these levels maintained, traders need to see a very strong corporate and fundamental third quarter. It is not a given this will be the case at this time.

In South Korea, across the Korean Straight, the Kospi Composite Index was slightly lower by mid-morning trade hours. In Hong Kong, the Hang Seng Index was down marginally at 0.06 percent.

Looking at the Chinese markets this morning, they also fell lower after being up most of the morning. The Shanghai Composite Index was down 0.06 percent and the smaller Shenzhen Composite Index was down 0.46 percent this morning.

Revisiting the Forex world, before closing, there will be a lot of volatility within the British Pound, US Dollar and euro pairs. There is news coming out regarding the Brexit that is causing some market turmoil. Also recent economic data from the United States is muddying the water as ether or not the Fed will raise rates in December. The United States is releasing their advanced GDP later today.