After a strong opening the US stock market lost steam in late trading and closed mixed with S&P 500 slightly up 0.1% and Nasdaq down 0.5%. Strength was mainly within energy companies on the back of new highs for crude oil prices while weakness was mainly within technology and financials. Because of the negative close on the US stock market most Asian stock markets are in negative territory this morning with Nikkei and Hang Seng down 0.8% and 1.9% respectively.
With the turnaround on stock markets, bond yields are lower since the close of European markets yesterday. 2Y and 10Y US bond yields are down 6bp and 4bp to 2.37% and 3.82% respectively.
In the FX market the main move has been some strengthening of funding currencies JPY and CHF on the back of weaker stock markets. USD/JPY and EUR/JPY this morning are trading at 104.18 and 161.59 respectively. EUR/USD is trading largely unchanged since the European close yesterday at 1.5512. No major moves in Scandinavian currencies overnight. This morning EUR/NOK is trading at 7.8066 and EUR/SEK is trading at 9.2853.
Crude oil prices continue to set new record highs as both Saudi Arabia and OPEC indicate that they currently see no need to increase crude oil production further. This morning the NYMEX June crude oil future is trading slightly higher at USD 127.3.
This morning Bank of Japan as expected left its leading interest rate unchanged at 0.5% in a unanimous decision. There has been no market reaction on the decision. We are waiting for board governor Shirakawa's press briefing later today.