1. The April nonfarm payrolls data, which came in at 175,000 jobs, fell below market expectations of 240,000 jobs. This weaker-than-expected data raised concerns about the pace of economic recovery and led to speculations that inflation might cool down faster than anticipated.
2. US Treasury Yield: The reference to the US 10-year Treasury yield dropping below 450 basis points suggests a decline in long-term interest rates. The yield on government bonds is closely monitored by investors as it reflects market sentiment and expectations regarding economic growth and inflation.
3. Hong Kong Stock Market: Despite the absence of mainland Chinese investors due to the holiday period (referred to as "Northbound funds" or "北水"), the Hong Kong stock market recorded a nine-day consecutive increase. This upward trend was attributed to the strengthening of the Chinese yuan and brokerage firms raising their expectations for Hong Kong's GDP. As a result, investors sought undervalued Chinese stocks with improved performance, such as Tencent (700) and Alibaba (9988), leading to increased buying activity in those stocks.
4. USD/JPY Exchange Rate: The USD/JPY exchange rate crossing above 160 and subsequently falling to 151.85 indicates the volatility in the currency pair. Market participants speculated that the Bank of Japan would intervene to support the weakening Japanese yen. After the release of the nonfarm payrolls data, the US dollar weakened against the yen before rebounding. The short-term resistance for the USD/JPY pair was seen at 155, while support was expected around 152. Traders and investors are now awaiting more inflation data to confirm the future direction of the US dollar.
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