lundi 23 mars 2015

Dollar Recovers from Lower Opening

The US dollar opened broadly lower in Asia but trended higher through the first half of the European morning. The euro peaked just above $1.0880 and fell a little more than a cent (~$1.0770) before finding a reasonable bid. Sterling approached $1.50, could not sustain the upward momentum, and by late morning in London slipped below $1.4850. The dollar has been sidelined against the yen; trading in a 20-tick range on either side of JPY120. Choppy consolidative activity may continue.



The Antipodean currencies are little changedwhile the drop in oil prices (~2%) took a toll on the Canadian dollar. Emerging market currencies are mostly lower though the Asian currencies have held on to their early gains, led by the Malaysian ringgit which rose 1%.



The MSCI Asia-Pacific Index rose about 0.6%, extending last week's 2.7% rise, to reach new six-month highs. European bourses are mostly lower, with Spain as the main exception. The Dow Jones Stoxx 600 is off 0.4%, led by consumer discretionary and energy sectors.



Bond markets are mixed, with core bonds yields slightly lower. Of note, the Japan's 10 year benchmark yield slipped below 30 bp to reach its lowest level since late January. European peripheral bond yields are 1-2 bp higher. Greek bonds remain under pressure as no new initiative is expected to come from today's meeting between Merkel and Tsipras, which is expected to be followed by a press conference.



The news stream is light to start the week. Regional elections in France over the weekend resulted in strong showing for the center-right UMP (~30%) and the far-right National Front (~25%). Run-ff will be held in a couple weeks. In Andalusia's regional election saw the Socialists ahead in their stronghold, followed by the ruling PP. Podemos and Ciudadanos both won seats in the regional parliament (15 and 9 respectively).



Given the dramatic response to last week's FOMC meeting,




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Dollar Recovers from Lower Opening

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