FOREX: Higher US Yields Provide Greenback Reprieve
Apr-11 16:48
- Friday’s FX session was very volatile on Friday and was a tale of two halves for the US dollar. Initially, the greenback continued to come under pressure, culminating in a further 1.7% depreciation for the US dollar index to 99.01 lows, the lowest level since April 2022. Price action had been exacerbated by China announcing additional tariffs on US goods, reaching 125%.
- The euro was the main beneficiary of this dynamic, and EURUSD narrowed the gap to the 1.15 handle substantially, reaching a 1.1473 high. However, the low yielding safe haven also made strong advances against the dollar.
- However, as the US session developed, selling of treasuries became the main theme which provided a bottom for the waning dollar. The US 10 year yield rose as high 4.58%, prompting a strong reversal higher for USDJPY specifically. USDJPY rose from 142.07 lows to trade closer to 144 ahead of the close. The pair was also supported by a solid recovery for major US equity benchmarks, but does remain down 0.4% on the session.
- The reprieve for the dollar helped EURUSD back below 1.13, also roughly 200 pips off the prior session highs. In tandem USDCHF headed back towards 0.8200, however the earlier 0.8099 low matched perfectly with touted support, the 76.4% retracement of the Jan 15 '15 - Dec 15 '16 recovery. SNB domestic sight deposits data out Monday will give indication on any potential intervention this week.
- Other major currencies such as GBP, AUD and CAD have all strengthened in line with the dollar index adjustment, however, NZD remains an outperformer. Nothing stands out in the newsflow to explain this, however, NZDUSD did reverse the entirety of the post-liberation day selloff which may have triggered some additional short covering above the 0.5800 mark.
- China trade data and FOMC speech highlights Monday’s session, before the focus will turn to central bank decisions in Canada and ECB later in the week.
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FED: US TSY 9Y-11M AUCTION: NON-COMP BIDS $87 MLN FROM $39.000 BLN TOTAL
Mar-12 16:45
- US TSY 9Y-11M AUCTION: NON-COMP BIDS $87 MLN FROM $39.000 BLN TOTAL
US STOCKS: Equities Midday Roundup: Chip Stocks Buoy Tech Sector
Mar-12 16:37
- Stocks are trading firmer at midday, off lows with the DJIA lagging SPX Eminis and Nasdaq Wednesday. Currently, the DJIA trades up 26.09 at 41459.57, SPX eminis +47.25 at 5624.25, Nasdaq +285.23 at 17721.33.
- Information Technology and Communication Services sector shares led gainers by midday, chip makers supporting the former with Micron Technology +7.54%, NVIDIA Corp +6.18%, Intel +4.47%, Advanced Micro Devices +3.62% and Broadcom I+3.42%.
- Interactive media and entertainment shares supported the Communication Services sector with Netflix +1.96%, Meta Platforms +1.94%, Take-Two Interactive +1.06% and Alphabet +0.84%.
- On the flipside, Consumer Staples and Health Care sectors underperformed in early trade, leading laggers in Consumer Staples included Brown-Forman -6.69%, Estee Lauder -4.80%, Hershey -3.49% and Mondelez International -3.35%.
- Meanwhile, pharmaceuticals and services shares weighed on the Health Care sector: Regeneron Pharmaceuticals -4.43%, Universal Health Services -4.42%, Baxter International -3.93% and DaVita -3.80%.
IRELAND: Trump-Ireland Took Our Pharma & Other Companies Thru Taxation
Mar-12 16:24
Taoiseach (PM) Micheál Martin is meeting with US President Donald Trump in the Oval Office (live here). Trump says "Irish took our pharmaceutical and other companies away through taxation".
- Trump asked by Irish reporter about Irish "housing crisis". Trump says: "You know why there is a housing crisis. Because they are doing so well"."
- Trump: "The EU was set up in order to take advantage of the United States". Including Ireland, yes"
- Trump: 'Tax policy would stop Ireland from taking business'.
- Says there is still a "massive deficit" with Ireland and "We are going to even that out".
- At the start of his visit, Martin acknowledged "I am very, very conscious that in a very challenging world, thousands and thousands of jobs depend on the economic relationship between the United States and Ireland,"
- Reuters: "Ireland's Central Statistics Office said the deficit was a record 50 billion euros ($54.2 billion) last year. Using a different measure, the U.S. Bureau of Economic Analysis put it at $87 billion, ahead of Canada and Germany and behind only Vietnam, Mexico and China."
