Stagflationary Data Will Hurt Risk Mood: 3-Minutes MLIV

Group 1: Treasury Exposure Concerns - China has issued a warning to banks regarding their concentrated exposure to U.S. treasuries, advising them to reduce excessive holdings, particularly not affecting state banks [1][2] - The global ownership of U.S. treasuries is significant, and concerns are rising about the U.S. government's high debt levels and international policies, leading to potential reductions in treasury exposure by foreign investors [3][4] Group 2: Japanese Market Dynamics - The Japanese stock market is experiencing strong performance, with the Nikkei index up by 3.9%, and the yen showing volatility [4] - There is an expectation that Japanese Government Bond (JGB) yields will continue to rise, which could positively impact the Japanese economy and sustain the bullish trend in Japanese stocks [7] Group 3: U.S. Economic Outlook - There is a bullish sentiment regarding the U.S. economy, despite concerns about stagflation signals from upcoming inflation and jobs data [8][10] - The current jobs data for January is negative, and inflation is not expected to soften, indicating potential challenges for risk assets in the near term [9][10]