The Treasury market closed essentially unchanged having failed to sustain the rally that took place earlier in the day. In FX , the Yen was the main mover, appreciating to levels last seen in February following a slew of better than expected Chinese economic reports. Conversely, the Yen may also have been helped by the US decision to slap large tariffs on China’s tires for the next three years, with the likelihood that China will retaliate with some measures of its own (whilst small in direct importance – and in my view unlikely to lead to a full-blown trade war – these measures will tend to add to already heavily negative Dollar sentiment).

Gold continues to perform well. It closed above $1,000 for the first time and the trend still appears to be up. A break through $1,020 would open the way for $1,300 according to our technical chums. Other commodity markets however are not performing well. Crude posted a bearish daily reversal on Friday. Watch the support level at $67.12. Copper is also struggling – watch the $264 point.

Today’s Market Moving Stories

Japan’s Nikkei average shed 2.5 percent as investors are fretting about how the yen’s surge against the dollar will hurt exporters still reeling from the currency’s record rise last year. Japanese exporters are likely to feel the pain of a stronger yen at levels below 95 to the dollar. The 95 level was roughly the average rate seen by large exporters in the Bank of Japan’s last quarterly tankan survey for the business year to March. Nobel Prize winning economist, Joseph Stiglitz remarks to Bloomberg that the problems in the US banking sector are worse than they were in 2007, before the crisis erupted. He states that the US had failed to fix

Source: Seeking Alpha (blog)