U.S. bond yields are sharply higher across the board following a public market holiday on Friday, as traders continue to eye upward inflation trends following the election of Donald Trump. The yield on the benchmark 10-year Treasury note is 15 bps higher at 2.27%, while the 30-year Treasury bond yield is over 3% for the first time since January. The movement has also lit a fire under the greenback, with the U.S. dollar index up more than 1%, hitting 100 for the first time in almost a year.

Economy

U.S. President-elect Donald Trump has made the first official appointments to his White House administration after a shake-up on Friday that saw VP-elect Mike Pence replace Chris Christie as the head of his transition team. RNC Chairman Reince Priebus has been selected as Chief of Staff, while Trump's campaign Chairman and former head of news outlet Breitbart, Steve Bannon, will lead as Chief Strategist and Senior Counsel.

The outlook for global sovereign ratings is negative possibly until 2018 amid expectations for low economic growth and high public-sector debt, according to Moody's Investors Service. Around 26%, or 35 out of 134 sovereigns, currently have a negative outlook, marking the largest proportion since late 2012. The news comes as a two-day thumping wipes out more than $1T across bond markets worldwide.

Japan's economic growth handily beat expectations in the July-September period, expanding for a third straight quarter as exports recovered, but weak domestic activity cast doubt on hopes for a sustainable recovery. While GDP grew at an annualized 2.2% pace, household spending and capital investment were flat on quarter, despite efforts by Prime Minister Shinzo Abe to get companies to spend more of their cash.

Mixed Chinese economic data for October came out overnight, released by the National Bureau of Statistics. Retail sales rose a weaker-than-expected 10%, slowing from the previous month's 10.7% growth, while industrial output expanded 6.1%, matching September's pace but remaining a hair below expectations. Meanwhile, fixed-asset investment climbed by 8.3% in the January-October period, in-line with estimates.

A powerful 7.8 magnitude earthquake pummeled central New Zealand early Monday, killing at least two people, damaging roads and buildings and setting off hundreds of strong aftershocks. "It's just utter devastation, I just don't know... that's months of work," New Zealand Prime Minister John Key declared. "It's hard to believe that the bill is going to be less than a couple of billion."

South Korean prosecutors have questioned the heads of some large conglomerates, including the chairman of Hyundai Motor (OTC:HYMLF), and plan to question the de factor head of Samsung Group in a probe over a political scandal involving President Park Geun-hye, according to Yonhap News Agency. Pressure is mounting on Park to step down after hundreds of thousands of demonstrators marched in the capital on Saturday to protest allegations that she let a friend meddle in state affairs.

Italian Prime Minister Matteo Renzi may not stay on if his referendum on constitutional reform - that would reduce the role of the upper house Senate and cut the powers of regional governments - fails on Dec. 4. "If I have to stay on in parliament and do what everyone else has done before me, that is, to scrape by and just float there, that does not suit me," he said in a radio interview.

After gathering in Brussels to discuss the future of Europe-U.S. relations, EU foreign ministers said the bloc would stand by its key foreign-policy positions on issues including the Iran deal, Russia's annexation of Crimea and climate change, but vowed to work with the Trump administration. Not everyone attended the emergency meeting. Britain's Boris Johnson called it "unnecessary," Hungary's Peter Szijjarto called it "hysterical" and France's Jean-Marc Ayrault blamed scheduling issues for his absence.

Colombia's government and Marxist FARC rebels have agreed on a new peace pact to end a 52-year war, six weeks after the original was narrowly rejected in a referendum amid objections it was too favorable to the rebels. The new accord, which will be presented to Congress for a vote, includes several new provisions - from requiring FARC to surrender money and holdings to infrastructure development for the countryside.

Stocks

Samsung Electronics is buying Harman Industries (NYSE:HAR) for $112 a share in cash, or a total equity value of about $8B, placing the company in the vanguard of the auto industry. The deal - Samsung's (OTC:SSNLF) largest acquisition in its history - will reshape the pecking order in the global automotive supply chain, which has become of increasing interest to tech firms in recent years as cars become more connected.

The EPA has initiated proceedings against Audi (OTCPK:AUDVF) over the discovery of a newly reported defeat device, according to Bild am Sonntag, which said the regulator would hear from a senior group of VW (OTCPK:VLKAY) engineers this week. Separately, SAIC Motor and Audi have reportedly signed an agreement that will significantly expand the German automaker's ability to produce cars in China, the world's largest auto market.

Toyota will pay up to $3.4B to settle claims that some of its trucks and SUVs lacked proper rust protection, leading to premature corrosion of vehicle frames. The proposed settlement covers about 1.5M Tacoma compact pickups, Tundra full-size pickups and Sequoia SUVs and estimates the value of frame replacements at around $15K and inspections at $60 per vehicle. However, Toyota (NYSE:TM) admitted no liability or wrongdoing in the proposed settlement.

As part of its plan to expand in the growing industry, Honda (NYSE:HMC) expects to ramp up business jet production and assemble 80 planes annually by March 2019, up from 36 currently. The company began deliveries of its $4.5M jet in December and has received around 100 orders so far, mainly from customers in North America and Europe.

Novartis is considering selling its struggling eye care division, Chairman Joerg Reinhardt told SonntagsZeitung, but all options - including a turnaround - are still on the table. According to Bloomberg, the drugmaker is also in talks to acquire U.S. generic-drugs maker Amneal Pharmaceuticals as it seeks to bolster its Sandoz business amid consolidation in the industry. NVS -1.3% premarket.

More M&A? Siemens (OTCPK:SIEGY) has agreed to buy Mentor Graphics in a $4.5B all-cash deal that will further build the German engineering group's software capabilities. Mentor (NASDAQ:MENT) has been under pressure since Elliott Management took an 8.1% stake in September, saying its shares "were deeply undervalued." MENT +19% premarket.

Teen retailers are continuing to struggle... American Apparel (OTCPK:APPCQ) has filed for its second Chapter 11 bankruptcy in just over a year, listing assets and liabilities in the range of $100M-$500M. Separately, Canada's Gildan Activewear (NYSE:GIL) agreed to buy intellectual property rights related to the American Apparel brand for about $66M in cash, but will not be purchasing any retail stores assets.

Following a state ban of nearly two decades, ultimate fighting/MMA made a big comeback in New York on Saturday, as UFC 205 drew more than 20,000 fans to Madison Square Garden (NASDAQ:MSG). Conor McGregor came out victorious, winning the lightweight title via total knockout of Eddie Alvarez in the second of five rounds. The fight also set a new record for a live gate at MSG, bringing in $17.7M dollars.

Some of the richest investors on Wall Street will give the world a glimpse today of how they make their money. Hedge fund managers overseeing more than $100M in U.S. traded stocks will disclose their holdings to the SEC in a Form 13F. Filed four times a year, the reports show which sectors these traders were betting on when the quarter ended, roughly 45 days ago.

Citigroup is preparing to move up to 900 jobs from London to Dublin as part of its preparations for Britain's exit from the EU, the Sunday Times reports. "They have been testing the Irish political and regulatory regime on a macro level," sources added, saying that Citi (NYSE:C) was exploring options for office space and held a board meeting in the Irish capital last month. C +1.1% premarket.

U.S. goods could suffer sales hits in China if President-elect Donald Trump goes through with his "naïve" plan of slapping a large 45% import tariff on Chinese products, according to state-backed newspaper Global Times. Should any such policy come into effect, China will take a tit-for-tat approach. "A batch of Boeing (NYSE:BA) orders will be replaced by Airbus (OTCPK:EADSY). U.S. auto and iPhone (NASDAQ:AAPL) sales in China will suffer a setback, and U.S. soybean and maize imports will be halted."

Today's Markets

In Asia, Japan +1.7% to 17672. Hong Kong -1.4% to 22222. China +0.5% to 3210. India closed.
In Europe, at midday, London +0.3%. Paris +0.2%. Frankfurt +0.2%.
Futures at 6:20, Dow +0.2%. S&P flat. Nasdaq -0.1%. Crude -1.5% to $42.78. Gold -0.1% to $1223.40.
Ten-year Treasury Yield +15 bps to 2.27%

Today's Economic Calendar

1:20 PM Fed's Kaplan: Monetary Policy
4:30 PM Fed's Lacker speech