Treasury yields went higher across the curve, with the short end adding more than the back end. The hawkishness spooked equity markets with Wall Street finishing slightly in the red. APAC stocks are a little better, with most indices seeing a small gain.
USD/JPY is steady despite Japanese national CPI year-on-year to the end of October coming in at 3.7% today, above 3.6% anticipated and 3.0% previously. The hot inflation number comes behind a series of disappointing data prints this week.
Japanese core machine orders were -4.6% month-on-month for September. The Ministry of Finance (MoF) Japan tertiary industry activity index came in at -0.4% for September.
Crucially, the Japanese seasonally adjusted 3Q quarter-on-quarter GDP was -0.3% against forecasts of 0.3% and 0.9% previously.
Although unemployment is reasonably low, Japan’s GDP and CPI figures heighten the risk of stagflation for the Japanese economy.
After UK retail sales data, the US will see home sales figures. There will also be a number of central bankers providing commentary.
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