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·         Dollar firms as investors keep eagle eye on Fed guidance

The U.S. dollar held gains against major currencies on Wednesday as investors looked to the U.S. Federal Reserve’s policy meeting for indications it could start rate hikes earlier or let bond yields rise further.

Against the yen, the greenback firmed 0.1% to 109.085 yen, hovering near nine-month highs hit this week. The euro was flat versus the dollar after declining in the past three sessions.

With Fed policymakers expected to forecast the fastest U.S. economic growth in decades in the wake of COVID-19 vaccinations and $1.9 trillion in new stimulus, market participants will be focused on cues that the central bank could start raising interest rates in 2023, earlier than it had said.

The dollar index stood at 91.908, having risen for three straight sessions on support mainly from elevated U.S. bond yields. [US/]

 

The euro changed hands at $1.1902, but the common currency could test last week’s 3 1/2-month low of $1.18355 on a possible delay in vaccinations.

Europe’s medicines watchdog will release results of its investigation into incidents of bleeding, blood clots and low platelet counts in recipients of AstraZeneca’s coronavirus vaccine on Thursday afternoon.

The British pound was down about 0.1% at $1.3886 in Asian trading on Wednesday. The currency has come under pressure from profit-taking after it hit a near three-year high last month on the back of a fast vaccine roll-out.

In the cryptocurrency market, bitcoin fell 2.2% to $55,665.45, slipping further away from a record high of $61,781.83 hit on Saturday.

 

·         U.S. House approves small business Paycheck Protection Program extension to May 31

 

·         Yellen eyes deeper economic cooperation with South Korea: Treasury

U.S. Treasury Secretary Janet Yellen on Tuesday told her South Korean counterpart Namki Hong she was ready to deepen economic and financial cooperation between the longtime allies, the Treasury said in a statement.

Yellen also conveyed her intention to work with South Korea, both bilaterally and multilaterally, on regional and global challenges including the economic response to the COVID-19 pandemic and climate change, Treasury said.

 

·         U.S. facing biggest migrant surge in 20 years: Homeland Security

The United States is facing the biggest surge of migrants at its southwestern border in 20 years, the homeland security secretary said on Tuesday as the Biden administration races to handle an influx of children trying to cross the U.S.-Mexico border alone.

 

·         European new car sales drop by 20.3% year-on-year in February: ACEA

European car registrations fell in February, industry data showed on Wednesday, as coronavirus lockdowns and accompanying uncertainty across Europe took a toll on sales.

 

·         Bolstered by allies, Biden officials take blunt message to first China talks

Beijing has called for a reset to ties, now at their lowest in decades, but Washington has said the Alaska talks will be a one-off, and any future engagement depends on China improving its behaviour.

·         China puts the pandemic behind it, aims for less commodity-intensive growth

While much of the world is still dealing with the coronavirus pandemic, China’s economy is showing signs that it has already passed the peak of a domestic recovery.

One sign the initial burst is over lies in commodity prices. China is easily the world’s biggest buyer of copper, according to pre-pandemic data from 2019, and demand from the country influences prices globally.

“China remains a major source of commodity demand but one that is expanding slower,” Institute of International Finance analysts said in a note Tuesday. They pointed out that in contrast to policies that helped drive a surge in commodity prices or a “super-cycle” more than a decade ago, Beijing used more conservative stimulus measures to address the pandemic.

Going forward, the analysts expect China will use “policy stimulus more sparingly” and grow at a slower 5% to 6% pace, which will not boost growth in emerging markets as much as the country had in the past.

Chinese authorities would also like to shift the economy’s reliance to consumption, and away from more traditional industries like manufacturing that would require more commodity purchases.

The recent demand for commodities has been driven by continued fiscal stimulus overseas, while China’s attempts to reduce carbon emissions have limited the availability of some supply, said Gu Shuangfei, commodity analyst at Hangzhou-based brokerage Nanhua Futures. Gu expects prices could increase slightly in the short term, but gains will ease as overseas production recovers.

 

·         Entering China is now easier for people who have a vaccine — but only if it’s made in China

China is making it easier for foreigners who have been inoculated with Chinese-made coronavirus vaccines to enter the country, after shutting its borders for international travel more than a year ago due to Covid-19.

Multiple Chinese embassies around the world — including those in the United States, United Kingdom, India, Israel and the Philippines — issued notices on Monday outlining how foreigners can go about applying for visas to enter China.

 

·         Japan households amass record financial assets as COVID-19 crimps spending

Japanese households’ financial assets hit a fresh record near 2 quadrillion yen last year, half of which was in cash and bank deposits, in a sign the coronavirus pandemic encouraged them to save rather than spend.

The data underscores the challenge policymakers face in firing up consumption and averting a return to deflation, as the lingering pain from the COVID-19 crisis keep companies from raising wages and prices.

The balance of financial assets held by households rose 2.9% from a year earlier to a record 1,948 trillion yen ($17.85 trillion) as of the end of December, Bank of Japan data showed on Wednesday.

 

·         Japan may decide Thursday whether to end Tokyo's COVID-19 emergency

As the government looks to decide Thursday whether to end the COVID-19 state of emergency covering the Tokyo metropolitan area as scheduled on Sunday, opinions are still divided among governors and experts over whether the situation has improved enough to lift the emergency.

 

·         Taiwan to open first travel bubble, with tiny Palau

Taiwan will form its first travel bubble during the COVID-19 pandemic, with the tiny Pacific nation of Palau, the government said on Wednesday.

Taiwan has kept the pandemic well under control thanks to early and effective prevention, but has kept its borders largely shut, and the bubble marks a small return to normality. Taiwan currently has only 29 active cases being treated in hospitals.

 

·         Taiwan bolsters South China Sea deployments, gets U.S. submarine parts approval

 

·         Philippines says wider lockdown possible as coronavirus infections spike

A wider lockdown in the Philippines cannot be ruled out if its surge in COVID-19 infections continues, its health minister said on Wednesday, as authorities announced strict curbs on international arrivals to arrest the virus spread.

 

·         Australia urges EU to send 1 million COVID-19 vaccines for PNG amid fresh outbreak

Australia said on Wednesday it will ask the European Union to release 1 million doses of a COVID-19 vaccine to help Papua New Guinea (PNG) battle a dangerous outbreak that authorities fear could spread to other parts of the region.

 

·         India's coronavirus infections rise by highest in three months

India’s daily coronavirus infections jumped by 28,903 on Wednesday, data from the health ministry showed, for the highest increase since Dec. 13 and taking the nationwide tally to 11.44 million.

Deaths swelled by 188, the highest figure in two months, to stand at 159,044.

 

·         Oil climbs as surprise drop in U.S. crude stocks outweighs European vaccine woes

Oil prices climbed on Wednesday as investors weighed a recovery in U.S. refinery activity as industry data showed U.S. crude stockpiles unexpectedly fell last week against concerns of rocky demand in Europe.

Brent crude futures rose 35 cents, or 0.5%, to $68.74 a barrel by 0641 GMT, after initially falling as much as 27 cents.

U.S. West Texas Intermediate (WTI) crude futures rose 43 cents, or 0.7%, to $65.21 after falling as much as 18 cents in early trade.

The price gains halted three straight sessions of declines for both benchmarks.

U.S. crude inventories fell by 1 million barrels in the week to March 12, according to trading sources citing data from the American Petroleum Institute. Analysts in a Reuters poll had expected a build of 3 million barrels.

 

·         Goldman Sachs sees higher oil price to boost currencies of major exporters

Zach Pandl of Goldman Sachs says he likes commodity currencies as a whole, especially those of some major oil exporters that are about to tighten monetary policies.

 

Reference: CNBC, Reuters