Market 04/17: 20Y bond auction successful

Auction of $13 billion 20Y Treasury bonds with high stop-through

Details of today's auction results:

High Yield: 4.818% (market yield: 4.843% | previous session: 4.542%)
=> Stopped through level: 3 bps
- Success rate for bids at High Yield: 79.31% (previous session: 94.02%)
Bid-to-cover: 2.82 (slight increase from previous session: 2.79)
Allocation ratio: domestic demand increased compared to previous session
- Dealers: 9.09% (lower than previous session: 9.35%)
- Foreign bidders: 74.71% (higher than previous session: 73.49%)

=> Although this is an auction with a high stop-through level, the reason is that bond yields on the market surged quite high from yesterday.

Stock market also carries fearful sentiment, especially after Powell's hawkish speech yesterday.

China: Yuan weakens as PBOC eases controls - businesses hoard USD

China's easing of controls on its domestic currency causes Yuan to drop rapidly: CNY/USD tests psychological level 7.3

Chinese businesses are hoarding dollars because they expect CNY to weaken => creating a vicious cycle that makes Yuan depreciate further (detailed analysis).

PBOC data shows that foreign exchange reserves of Chinese businesses have increased by $53.7 billion since September to $832.6 billion.

Meanwhile, China criticizes US move to investigate its shipbuilding industry

WTI oil price falls for 3rd day after crude oil inventories rise

Oil inventory report update:

API

Crude oil +4.09 million barrels (expected +600,000)
Cushing -169,000
Gasoline -2.51 million barrels (expected -1.0 million barrels)
Distillates -427,000 (expected -400,000)

DOE

Crude oil +2.375 million barrels (+600,000)
Cushing +33,000
Gasoline -1.154 million barrels (expected -1.0 million barrels)
Distillates -2.76 million barrels (expected -400,000)

Biden administration continues to add oil to SPR reserves

US crude oil production unchanged - near record high

Crypto Market: Bitcoin drops sharply to 60,000 USD level

Bitcoin drops to around 60,000 USD for the first time in a month, ahead of halving

Hong Kong Bitcoin ETF to start trading on 04/30, expected to attract 25 billion USD from investors

An anonymous whale bought 496 million Bitcoins from Coinbase

Earnings results: United, ASML, Abbott, US Bancorp

1 - United

Revenue: 12.5 billion USD, +9.7% Y/Y, thanks to strong demand in domestic and Atlantic markets.
- Passenger revenue: 11.313 billion USD, revenue/seat +11% in Atlantic market and +6% in domestic market.
- Cargo revenue: Slight decrease -1.8% to 391 million USD
Diluted EPS: -0.38 USD, slight improvement from -0.59 USD last year
Fuel costs: -6.9% to 2.954 billion USD, reflecting decline in global oil prices
Operating income: up from -43 million USD last year to 99 million USD

2 - ASML

Total order value 3.6 billion EUR (including EUV extreme ultraviolet lithography machine 0.7 billion EUR)
Net revenue -22% Y/Y to 5.3 billion EUR
Gross margin 51% (unchanged from same period last year)
Operating margin 26% (-6 pp Y/Y)
Expected future revenue:
- FY24: unchanged from this year
- FY25: strong growth

3 - Abbott

Revenue: 10.0 billion USD, +2.2% Y/Y, showing resilience in key markets
- Nutrition: revenue reaches 2.1 billion USD, strong demand.
- Diagnostics: COVID-19 test sales declined but organic growth still at 5.4%
- Medical devices: Revenue 4.5 billion USD, 14.3% growth, focus on diabetes and structural heart
Adjusted EPS: 0.98 USD