Negative Sentiment Persists as Yields Spike Further

During the Asian session, Chinese data for March came out better than expected but failed to provide any optimistic stimulus for the markets. The yearly CPI index rose from 0.9% to 1.5%, above 1.2% expected, while the monthly change declined from 0.6% to 0.0%. At the same time, the PPI index printed 8.3% year-on-year, down from 8.8% previously. 

The Australian dollar slid after the data and was down for the fourth consecutive day as traders took profits after the post-RBA rally during the last week. 

Elsewhere in the FX market, the USD has continued in its dominance - pushing the USDJPY pair to fresh seven-year highs above 125.30, while the GBPUSD pair declined below 1.30 for the first time since November 2020. However, the euro has remained resilient so far today, trading flat near 1.0880.

There is no other major macro news on schedule today. Thus, investors might remain focused on the surging US yields. The 10-year yield traded above 2.75% today, the highest level since January 2019, while the 2-year yield jumped toward 2.6%, also unseen since January 2019.

US equities stumbled again, especially the high growth and tech sectors, as investors price in a 50 bps rate hike at the Fed's next two meetings. Still, the US benchmarks have been trading sideways over the last six months or so, so far escaping any strong bearish trends.