Europe in green as dollar struggles The persisting weakness in US Treasury yields and some encouraging vaccine news in Europe left the dollar bruised on Monday. The vaccine success in the US and the optimistic outlook for the economy, although supportive to the greenback, have become old news for traders, while the stabilization in US Treasury yields suggests the Fed is likely becoming more successful in convincing markets that monetary policy will remain accommodative at current levels until substantial progress [..]
Risk-on weighs on dollar Reduced appetite for safety kept the dollar pinned on the downside during the European trading hours as the FOMC meeting minutes reiterated late on Wednesday what markets already know about the progressive recovery in the US economy and the Fed’s commitment to keeping policy super accommodative until it sees sustainable growth. As usual, the minutes also highlighted that any upside inflation pressures this year will likely be transitory and interest rates will not rise before 2024. [..]
European indices hit record highs, but economic outlook still bleak The European equities had a pleasant start after a long weekend on Tuesday, rushing to catch up with the rally in US rivals, sending the STOXX 600 and the German DAX 30 to fresh record highs early on Tuesday. The stock rally emerged after a barrage of US data provided evidence that the recovery in the biggest economy of the world is picking up steam, while news that some Democrats favor [..]
Frustration with AstraZeneca continues Wednesday’s European session was not very productive for stocks and currencies, with the euro and the pound remaining negatively charged against the dollar despite the upbeat flash Markit PMI readings for March. The blames go to the troubling vaccination program in the Eurozone, which turned even uglier after AstraZeneca’s injections were blamed for causing blood clots in several countries. Although the EU lifted its suspension of the vaccine, frustration with AstraZeneca did not cease as Brussels [..]
European banks follow Turkish lira lower, but losses under control While the inflation fear factor holds intact in key developed economies even though price indices remain anemic, high inflation has been a truly tragic story in Turkey for a while, forcing the central bank to raise interest rates by two percentage points and more than expected on Friday. Such surprising decisions from emerging markets rarely create any global shock waves, though when President Erdogan, who is a strong opponent to [..]
German DAX 30 hits fresh record high The European session was mostly quiet, with the pan STOXX 600 claiming a small measure of gains as bond yields in the region continued to sideline below this week’s highs along with US Treasury yields. Yet, despite the softer positive tone, the German DAX 30 index managed to pin a new record high slightly above the 14,500 mark on the back of healthcare and real estate shares, which soared by 2.19% and 1.20% [..]
Riskier assets gain on dollar weakness Tuesday brought some risk-on trading back on the surface as the cooling in US Treasury yields and the slowdown in the dollar allowed risk-sensitive currencies to heal. The dollar index could not reach the 200-day simple moving average (SMA) earlier in the day, peaking slightly lower at 92.50 before easing to 92.00. Despite the weakness in the Japanese yen, dollar/yen also pulled back to seek support near 108.80 after marking another higher high at [..]
US futures could face another red day; European stocks recover Upbeat data releases continued to feed expectations of inflamed prices, and therefore an earlier monetary tightening on Monday, despite central banks using verbal intervention last week to play down any adjustment in their ultra-loose accommodative policy for the next couple of years. The US 10-year Treasury yield pared earlier losses on Monday to rise as high as 1.6130%, signaling that the downside pressure on Wall Street may stay in play [..]
Central banks react after yield rally It was a turbulent week for markets as the rapid rise in global bond yields triggered profit taking on stocks and harmed traditional safe-haven currencies, with the S&P 500 and Nasdaq set to close the week with considerable losses, though hold within the neutral-positive territory in monthly terms. Although investors got assurances from the Fed and other central banks that any tightening in monetary policy was long in the future, the yield rally over [..]
Bond yields shrug of Powell’s comments; US future point to the downside Nothing could stop bond yields from rising on Thursday, not even the Fed chief Powell, who once again told lawmakers of the House of Representatives on Wednesday that a persistent rapid inflation break above 2.0% will not be the case for the next three years. While his remarks assured investors, who were front-running the Fed, that the current ultra-lose monetary policy is here to stay, the US 10-year [..]
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