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GILT TECHS

(H2) Outlook Remains Bullish

SCHATZ TECHS

(Z1) Remains Above The 50-Day EMA

BOBL TECHS

(Z1) Northbound

BUND TECHS

(Z1) All Retracement Levels Breached

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The mood music turned optimistic after Chinese state media reported that Evergrande had paid a missed coupon on its Mar '22 dollar bond. The real-estate giant wired the payment just days ahead of the expiration of a 30-day grace period and thus averted a formal default. The news was received with a sigh of relief, even as the payment does not solve the firm's longer-term troubles.

  • Spot USD/CNH went offered in response to headlines surrounding the Evergrande situation but quickly recouped losses. The rate oscillates around neutral levels as we type.
  • Antipodean currencies led commodity-tied FX higher but trimmed gains thereafter. AUD/USD and NZD/USD remained within the confines of their Thursday ranges.
  • For the record, the RBA stepped in to defend its yield target for the first time since Feb but the Aussie dollar was unfazed.
  • JPY underperformed at the margin amid limited demand for safe haven currencies. Japan's core CPI rose for the first time in 18 months, albeit its growth rate registered at a modest level of +0.1% Y/Y. Still, BBG noted that core inflation would be closer to +1.4% Y/Y if the impact of trimmed mobile phone fees was discounted.
  • PMI reports from across the globe take focus from here alongside UK & Canadian retail sales data. Speeches are due from Fed's Powell, Williams & Daly, ECB's Villeroy & Riksbank's Ohlsson.