The US$ has regained much of its lost ground following the FOMC outcome of the previous session, while stocks are up by 1.0%/1.5%, led by technology stocks, which surged as jitters over the Fed’s warning of an economic slowdown were cushioned by upbeat US economic data. The metals are a bit lower, while oil remains close to $60.00pb.
The dollar received some help in its recovery, with Sterling falling sharply as the latest Brexit arguments continue, while German 10Y bund yields collapsed, to 0.04% from 0.12% just 2 days ago, and did nothing to help the Euro. The Aud and Kiwi have given up yesterday’s gains, while US$Jpy and US$Chf have both been choppy.
In terms of data, both the initial and continuing jobless claims fell more than expected, and the Philadelphia Fed Mfg Survey rebounded sharply from -4.1 last month to +13.7, assisting the dollar to regain its balance. Earlier, in Europe, the BoE kept the bank rate at 0.75% and the asset purchase target at £435Bio, as widely expected with both decisions made by a unanimous 9-0 vote. The SNB also left its “expansionary” monetary policy unchanged, as expected, at -0.75%. Elsewhere, the UK, retail sales including auto and fuel rose by 0.4% mm, 4.0% yy in February, much better than expectation of -0.4% mm, 3.3% yy.
Friday will kick off with the Japanese inflation figures for February after which the flash Manufacturing/Services/Composite PMIs will dominate traders focus, beginning with the Nikkei Mfg PMI and then those from the EU and the US. There will also be the release of the EU Current Account and speeches from the ECB’s De Guindos and Mersch, while the US will see the January Wholesale Inventories (exp 0.2%), the February Existing Home Sales (exp 5.10 mio,+ 2.2%) and Monthly Budget Statement. Have a good weekend.
Economic data highlights will include:
Fri: Japan CPI, BOE Quarterly Bulletin, EU/US Flash PMIs, Speeches: ECB’s De Guindos/Mersch, US Existing Home Sales, Wholesale Inventories, Monthly Budget Statement
Market moves, in brief:
FX: DXY 96.43 (0.51%)
Bonds: US10Y; 2.53% (+0.34%), German 10Y; 0.042%(-49.64%), UK 10Y; 1.063% (-7.27%), Australian 10Y; 1.89% (-2.98%), NZ 10Y; 2.010% (-2.43 %), China 10Y; 3.175% (+0.6%)
Stock Indices: DJI; +0.91%, S+P; 1.09%, NASDAQ; 1.20%, EUStoxx50; +0.14%, FTSE100; +0.88%, Shanghai Composite; +0.35%,
Metals: Gold 1308 oz (-0.25%), Silver 15.46 oz (-0.12%), Copper 2.91 lb (-0.58%), Iron Ore 85.65 pt(+0.28%),
Oil: WTI 59.82pb (-0.25%)
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