April 24, 2018, by Lorcan Roche Kelly
The U.S. Treasury made clear yesterday that it is not pushing for the collapse of United Co. Rusal while softening its position on some of the sanctions announced two weeks ago. It extended the period during which companies could keep trading with Rusal by almost five months and said that should Oleg Deripaska divest himself of the company, it would no longer be subject to any sanctions. Aluminum, which posted its biggest one-day drop since 2010 in London trading yesterday, is falling further today, while shares in the company jumped a record 43 percent in Hong Kong. Busy metal traders still face a bumpy ride ahead as many other uncertainties persist.
Nearly never bulled a cow, and yesterday’s 2.9957 percent high in the 10-year Treasury yield means the bond continues to survive below the 3 percent psychological level. The yield continued to slip this morning, and was at 2.9659 percent by 5:50 a.m. Eastern Time as investors appeared to reassess the push higher. Rising commodity prices and associated inflation pressures have taken some of the blame for the selloff in Treasuries but the inability to break through the key threshold on the 10-year is giving some bond bulls confidence.
Stop me if you’ve heard this one before. Shares in Deutsche Bank rallied 3 percent after Bloomberg reported it’s planning a restructuring. The German lender is considering extensive cuts to its U.S. cash equities business as part of a wider reorganization of the business, according to people familiar with the matter. A decision may be made as soon as this week.
Overnight, the MSCI Asia Pacific Index gained 0.4 percent, while Japan’s Topix index closed 1.1 percent higher with equities boosted by a weakening yen. In Europe, the Stoxx 600 Index was 0.1 percent higher at 5:50 a.m., with investor focus remaining on earnings. S&P 500 futures pointed to a gain at the open, and gold was slightly higher.
There was a rare shot in the arm for embattled Chinese stocks overnight when authorities there signaled they are prepared to tweak policy if trade or financial risks threaten a sharp deceleration in growth. A Politburo statement mentioned the need to boost domestic demand for the first time since 2015, and dropped a reference to deleveraging. The country’s stocks rallied the most in two months following the communication, a small change in fortune for indexes that have seen substantial losses so far this year.