· Dollar buoyed by U.S. recovery hopes, bitcoin near record $52,640
The dollar held its ground on Thursday after its first back-to-back gains in two weeks as upbeat data bolstered expectations that the U.S. economy would recover from the coronavirus pandemic faster than most of its peers.
Bitcoin traded just shy of the new record high of $52,640 reached overnight, with its roughly 58% surge this month prompting some analysts to warn that the rally might be unsustainable.
However, like many analysts, Westpac’s team expects the dollar to decline this year, weighed by the Fed’s relentless money printing.
The dollar index was little changed at 90.943 on Thursday in Asia after strengthening 0.2% overnight and 0.4% on Tuesday.
The gauge has gained about 1% this year, rebounding from an almost 7% slide in 2020 that extended to a 2-1/2-year low of 89.206 in early January.
Westpac recommends fresh dollar index shorts on rallies toward 91.0.
The euro was little changed at $1.20385 after sliding 0.5% overnight, the most in two weeks.
The dollar was almost flat at 105.845 yen, following a pullback Wednesday after reaching a five-month high of 106.225.
Treasury yields have given the dollar a boost in recent days, with the yield on the benchmark 10-year note rising as high as 1.333% overnight from around 1.20% at the end of last week. It pulled back in Asia on Thursday to 1.2669%.
“Rising U.S. yields have stopped the dollar from declining for now,” said Osamu Takashima, the Tokyo-based head of G10 FX strategy at Citigroup Global Markets Japan.
“In the longer term, we remain bearish on the U.S. dollar: we expect a risk-on environment globally and under such circumstances we think downward pressure on the U.S. dollar could revive.”
Focus will also be attuned to key data coming out of the U.S. Thursday for the latest indications on the health of the country’s economy. Initial jobless claims is the number to watch with economists surveyed by Dow Jones expecting 773,000 new claims, a slight decrease from the prior week.
Housing and manufacturing data is also due out on Thursday morning. U.S. stock futures moved slightly lower on Thursday morning.
Asian high-yield bonds are one of our favorite investments in credit space: UBS
Adrian Zuercher from UBS Global Wealth Management says equities are more attractive than bonds in the current market environment, and Asian junk bonds are better investments in the credit space.
· U.S. will pay WHO more than $200 million in membership fees withheld by Trump
· Johnson & Johnson has only a few million COVID-19 vaccine doses in stock as likely launch nears
Johnson & Johnson has only a few million doses of its experimental COVID-19 vaccine in its inventory even as likely U.S. regulatory authorization is only a few weeks away, White House officials said on Wednesday.
J&J remains committed to providing 100 million doses by June but deliveries are likely to be “back-end loaded” as J&J works with the U.S. government to boost supply, Jeffrey Zients, the White House’s COVID-19 response coordinator, said during a press call.
· A laboratory study suggests that the South African variant of the coronavirus may reduce antibody protection from the Pfizer Inc/BioNTech SE vaccine by two-thirds, and it is not clear if the shot will be effective against the mutation.
· Calls for global ‘pandemic treaty’ grow as anxiety swells over Covid origins
A global “pandemic treaty” has been proposed in a bid to ensure more transparency about future pandemics amid unease over China’s reluctance to share information about the coronavirus outbreak.
U.K. Prime Minister Boris Johnson is among those calling for an international treaty on pandemics that would see countries agreeing to share data about outbreaks of viruses and infectious diseases.
· As Russia and China seek to boost their global influence, analysts warn vaccine diplomacy is here to stay
International diplomacy is likely to determine who gets access to coronavirus vaccines over the coming months, analysts have told CNBC, with countries such as Russia and China seen using one of the world’s most in-demand commodities to advance their own interests abroad.
It is hoped the rollout of Covid-19 vaccines could help to bring an end to the pandemic. While many countries have not yet started vaccination programs, even high-income nations are facing a shortfall in supplies as manufacturers struggle to ramp up production.
Russia and China had made distributing face masks and protective equipment to hard-hit countries a central tenet of diplomatic relations last year. Now, both countries are seen adopting a transactional approach to the delivery of vaccines.
Agathe Demarais, global forecasting director at the Economist Intelligence Unit, told CNBC via telephone that Russia, China and to a lesser extent India, are betting on providing Covid vaccines to emerging or low-income countries to advance their interests.
“Russia and China have been doing this for a long, long time … especially in emerging countries because they feel traditional Western powers have been withdrawing from these countries,” Demarais said.
Russia and China are currently unable to meet the vaccine supply demands of their respective domestic markets and still export to countries around the world. Production represents the main hurdle to this challenge, while many high-income countries have pre-ordered more doses than they need.
· Hong Kong fast tracks China's Sinovac vaccine approval
Hong Kong's government on Thursday approved the Chinese-made Sinovac coronavirus vaccine for emergency use after a panel of experts fast-tracked its recommendation despite the drug's comparatively low efficacy.
· More 'Brexit' companies shift to the Netherlands as uncertainty persists
The flow of businesses moving to the Netherlands because of Brexit remained strong in 2020, even though foreign investment fell by a quarter as the coronavirus pandemic hit, the Netherlands Foreign Investment Agency said on Thursday.
· Switzerland on Wednesday announced a partial relaxation of the country’s coronavirus shutdown rules. Here’s what you need to know.
Swiss Health Minister Alain Berset announced on Wednesday some of the country’s coronavirus measures would be relaxed.
The relaxations will take place in stages on the first of each month, dependent of course on low infection rates - particularly with regard to new mutations of the virus.
· India to test travellers from Brazil, South Africa, UK after detecting new virus strains
India will make COVID-19 molecular tests mandatory for people arriving directly or indirectly from the United Kingdom, South Africa and Brazil in a bid to contain the spread of more infectious virus variants found in those countries.
· Indonesia gets tough on COVID-19 vaccine skeptics as phase two of inoculations begins
Indonesia’s government said it will impose a series of progressive sanctions on individuals who refuse to be vaccinated against COVID-19. The penalties include fines, the withdrawal of social aid and the loss of access to administrative and public services.
· Cloudy outlook for stalled jet fuel demand recovery
· White House ramps up effort to tackle automotive chip shortage
Top economic and national security officials in the White House have ramped up efforts to help the U.S. auto industry fight a growing shortage of semiconductor chips that has forced production cuts worldwide, a White House spokeswoman said.
· Taiwan minister flags improvement in auto chip supplies
· BOJ's Kuroda tell Suga March review aimed at sustaining easy policy
Japan’s central bank governor said on Thursday he told the country’s prime minister the bank would conduct a review of its policy tools in March to ensure it can maintain ultra-loose monetary settings for a long period.
Governor Haruhiko Kuroda said he also told Prime Minister Yoshihide Suga that the global economy appeared to be picking up, based on estimates issued by the International Monetary Fund.
· From city centres to ancient capital, protesters denounce Myanmar coup
· Oil prices climb on fears Texas freeze may hamper U.S. crude output
Oil prices rallied again on Thursday to hit 13-month highs as concerns that a rare cold snap in Texas could disrupt U.S. crude output for days or even weeks prompted fresh buying.
Brent crude climbed 89 cents, or 1.4%, to $65.23 a barrel by 0524 GMT, touching its highest since Jan. 20, 2020. U.S. West Texas Intermediate (WTI) crude futures gained 66 cents, or 1.1%, to $61.80 a barrel, registering its highest since Jan. 8, 2020.
Both benchmarks rose about $1 on Wednesday and have gained more than 6% since their close last Thursday.
· Texas energy freeze stretches to sixth day, raises Mexico's ire
Texas exports gas via pipeline to Mexico and via ships carrying liquefied natural gas (LNG) from terminals in Freeport and Corpus Christi. It also supplies numerous regions of the country, including the U.S. Midwest and Northeast.
The ban prompted a response from officials in Mexico, as U.S. gas pipeline exports to Mexico fell to 3.8 billion cubic feet per day on Wednesday, down from an average over the past 30 days of 5.7 billion, according to data from Refinitiv.
Reference: CNBC, Reuters
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