Research Team at ANZ, suggests that despite modest moves in fixed income markets overnight, a general tone of risk aversion remains. Key Quotes “Global equities are on the brink of a bear market, with the MSCI 17% below its 21 May 2015 peak. And perhaps just as well, most Chinese markets remain closed. Japanese yields fell into negative territory yesterday and remained there overnight, joining Swiss and shorter-term French, Dutch, and German government yields. Despite the overnight lift, US 10-year Treasury yields have dropped more than 50bps since the start of the year. Australian and New Zealand government bond yields have also fallen, but still offer some allure for yield hungry investors. Investors are becoming increasingly worried that the current environment will make it harder for corporates (including banks) to service their obligations, with bank and financial stocks under pressure at present. For countries reliant on the savings of other countries – Australia and New Zealand – a riskier perceived lending landscape will eventually hit home. When markets are jittery, a few choice words from the major central banks – the Fed, ECB, and BoJ – can usually be looked for to inject more calm. The feeling is that markets are pushing central banks into some kind of action, although scepticism remains on what can be achieved. With Yellen’s testimony tonight, it’s time to find out whether policymakers have more cards up their sleeves.” For more information, read our latest forex news.