- US Import Price Index rose 11.1% YoY vs 10.4% expected and 9.7% previously.
- US NFIB Small Business Optimism declined to 91.2 in April vs 91.8 expected and 91.9 previously.
- Toyota production will likely return to normal 2-3 months sooner than expected the Nikkei reported.
- Reports of Mortgage Fraud Reach Record Level – WSJ
- Last night, the CME increased crude oil margins by 25%
- The Bank of Japan on Tuesday decided to bolster its capital as a provision against potential losses from an asset-buying scheme, giving it room to ease monetary policy further – Reuters
- UK RICS House Price Balance improved to -21 in April vs -23 expected and previously
- Chinese Trade balance was better than expected in April at 11.4bn vs 3.2bn expected as Imports came in well below expectations.
- Swiss CPI fell back to 0.3% YoY in April
- It’s probably time to take a shot at shorting 10yrs. While economic surprises have not yet turned, they are now at levels that have historically not persisted for long outside of recessions:
When we combine this with the facts that Treasury yields are rich, posted their first reversal in a month, while vols remain low – buying puts on the 10yr future seems to be a pretty attractive bet. Who knows – we could get a replay of the 4Q09 price action.