CITI: NY Open, Keep Calm & Carry On - FJElite

Markets were calmer overnight, with the global rates selloff easing slightly, although US 30-year yields are still sitting at cycle highs around 5.16%. The better tone was helped by a well-received 20-year JGB auction and softer UK CPI, which supported a decent correction in gilts, especially at the front end. FX was mostly rangebound, though Indonesia stood out after a surprise 50bp hike, while USDJPY steadied and Japan’s finance ministry continued moderate verbal intervention. Even with the calmer price action, the bigger macro backdrop has not changed much, with developments in the Middle East still front and centre after Trump again threatened strikes on Iran if no deal is reached.

For today, the main focus is the FOMC minutes, with rates markets looking for any hint that hike discussions are becoming more serious. Nasdaq futures are outperforming ahead of Nvidia earnings tonight, while Target is also in focus for any read on US consumer sentiment. Elsewhere, the Kospi lagged on Samsung labour strike concerns, South Africa’s hotter CPI print supported expectations for a 25bp SARB hike next week, China left its 1-year and 5-year LPR unchanged, and political noise in Brazil remains in the background.