Stocks lower, Japanese yen nears 150 per dollar

DoubleLine Capital CEO Jeffrey Gundlach said U.S. Treasury yields “might be peaking between now and year-end.”

“Note how the long end is flat,” he said in a tweet, following an inventory of current yield levels. “Sign of yield increase exhaustion.”

The 10-year Treasury yield ticked up as high as 4.154% after reaching the best level since July 2008 through the U.S. markets session. It was last at 4.1485%. The 2-year Treasury note last traded at 4.5695% while the 5-year note traded at 4.3712%.

–Jihye Lee

Oil prices rallied on Thursday as markets shrugged off announcements that the USA will release more crude from its reserves.

Brent crude futures inched up 0.85%, or $0.80 to face at $92.41 per barrel, while U.S. West Texas Intermediate rose greater than $1, or 1.45% to $85.55 per barrel.

“Upward pressure though is coming from OPEC+ supply cuts and imminent EU sanctions on seaborne imports of Russian oil,” Vivek Dhar from Commonwealth Bank of Australia wrote in a note.

He added that the 15 million-barrel release of strategic U.S. oil stockpiles was already expected and is “too small to affect the market.”

— Lee Ying Shan

The unemployment rate in Australia for September was unchanged from the previous month at 3.5%, based on the Australian Bureau of Statistics – consistent with expectations of analysts in a Reuters poll.

Diana Mousina, senior economist at AMP Capital, said she expects the unemployment rate to remain in current levels within the near-term before rising next yr.

“Employment growth would wish to decelerate significantly to see an increase within the unemployment rate within the short-term,” she wrote in a note.

— Abigail Ng

Recession fears are roiling markets, but the standard playbook of taking cover in sovereign bonds is “obsolete,” says BlackRock.

“On this environment, bond vigilantes are back and heralding term premium’s return,” BlackRock said, adding that it’s underweight on government bonds.

The asset manager says that investors can still buy other forms of bonds, nevertheless.

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— Weizhen Tan

China’s central bank left its benchmark lending rates unchanged for a second consecutive month, matching expectations by most analysts in a Reuters poll.

The People’s Bank of China said it could hold the one-year loan prime rate at 3.65%, and the five-year rate at 4.30%, based on an announcement.

The PBOC earlier within the week also announced it could hold its medium-term policy loan rates regular.

—Jihye Lee

Hong Kong-listed shares of technology firms dropped sharply in early trade, with the Hang Seng Tech index down 4.6% and dragging down the broader Hang Seng index.

Heavyweight Alibaba was down 6.12%, while Tencent shed 4.26%.

Bilibili plunged 7.75%, while JD.com lost 5.82%. Meituan declined 6.23%.

— Abigail Ng

The Japanese yen edged near 150 against the greenback, at levels not seen since August 1990. It was last at 149.94 per dollar.

The yen hovered around 159.8 levels in April 1990, and last breached 160-levels in December 1986.

Japanese officials commented against further weakening of the currency Thursday, with Finance Minister Shunichi Suzuki saying the federal government will take “appropriate steps against excess volatility,” Reuters reported.

“Recent rapid and one-sided yen declines are undesirable. We absolutely cannot tolerate excessively volatile moves driven by speculative trading,” he said.

–Jihye Lee

Semiconductor stocks have been beaten down this yr, but investors with a longer-term view on the importance of chips to secular trends akin to 5G, electrification and artificial intelligence could look to purchase the dip.

Hedge fund manager David Neuhauser shares one chip stock he likes.

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— Zavier Ong

Japan’s trade deficit for September was at 2.09 trillion yen ($13.97 billion), based on provisional figures from the federal government – missing estimated figures by a Reuters poll expecting a deficit of two.17 trillion yen.

The country reported a trade deficit of two.82 trillion yen in August.

Exports for the month of September were at 8.82 trillion yen, while imports were at 10.9 trillion yen.

Japan’s trade deficit for the primary half of fiscal yr 2022-2023 is the most important on record, the finance ministry was quoted as saying in a Reuters report.

Japan’s fiscal yr starts in April, and the deficit for the April to September period was 11 trillion yen, data showed.

— Abigail Ng

The offshore yuan touched a record low of seven.2745 against the dollar overnight because the Communist Party of China’s National Congress continues. The offshore yuan last modified hands at 7.2708 per dollar.

“A really large uncertainty is when the Chinese government eases its strict zero-Covid policy,” based on a note by the Commonwealth Bank of Australia.

Analysts wrote that the strict measures are seen to stay until early 2023.

“The restrictions will lengthen the period of weakness in China’s economy and keep AUD/USD and NZD/USD undervalued for longer and push USD/CNH as much as 7.30,” the note said.

The danger-sensitive Australian dollar was weaker at $0.6264 early in Asia, while the Recent Zealand dollar modified hands at $0.5662.

— Abigail Ng

Investors monitored Treasury yields for recession signals Wednesday whilst a stronger-than-expected begin to earnings season has helped buoy markets this week.

Of the 64 firms within the S&P 500 which have posted third-quarter results through Wednesday, 69.4% have beaten expectations, based on FactSet data.

Still, surging Treasury yields have helped stocks get back to “real life” on Wednesday, based on comments from LPL Financial’s Quincy Krosby. On Wednesday, the yield on the 10-year Treasury rose as high as 4.136%, or its highest level since July 2008.

“A gentle 3-month/10-year inversion would reinforce the Treasury market’s signal that a recession is within the offing, because it has the repute of predicting a serious economic downturn,” Krosby wrote.

— Sarah Min