Asia mixed as China-US meeting is held

US stocks closed lower as market focused on rising inflation and its impact on borrowing costs. The DOW closed marginally lower by 0.04% with early gains from Boeing’s surge failing to hold up the index. The NASDAQ shed a similar 0.04% while the S&P closed flat. Yields on 10Y USTs closed higher at 1.6145%.

ECB President Christine Lagarde doubled down on the transitory inflation rhetoric during an address to the European Parliament on Monday; she reiterated that it would be sub-2% in the medium term even as it is at its highest since 2008 in the bloc. As well, Lagarde emphasised that rate hikes in 2022 would be “very unlikely.” The euro closed weaker at $1.1368 while yield on 10Y DBRs was higher at -0.229%.

Asian stocks closed mixed on Tuesday having kicked off firmer as President Biden held a meeting President Jinping. The HANG SENG cemented early gains to trade 1.17% towards the close while the NIKKEI and the NIKKEI held on to close 0.11% and 0.02% firmer respectively. The ASX struggled to recover from early losses, closing 0.67% weaker.

Jitters over another rate cut by the CBRT on Thursday have continued to spur the slump in the lira which touched 10.2136 to the dollar early Tuesday. The latest plunge – continuing the worst EM currency rout in 2021 – follows median estimates of another 100bps cut to the benchmark rate; the cut would follow October’s 200bps easing risking a further uptick in inflation which hit 19.89% in October. TURKEY 31s were slightly higher, with yield about 6.58% from Monday’s 6.55% close.

ANGOL Eurobonds were little moved on Monday even as the Finance Ministry announced plans for issuance latest 2022; the government did not rule out issuance in 2021 however. The country recently got a $1.5 billion grant from the World Bank available from January 2022 which should shore up coffers. ANGOL 29.