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· Dollar stronger following higher U.S. yields on Fed’s lower-for-longer stance

The safe-haven U.S. dollar held firmer on Friday, supported by higher Treasury yields and falling stock markets, as investors digested the Federal Reserve’s pushback against expectations of any early interest-rate hikes.

The dollar index was slightly higher following a 0.5% jump from Thursday that was the most in two weeks.

The benchmark U.S. 10-year yield climbed to a more than one-year peak of 1.754% overnight before easing to 1.706%, while Asian stocks followed Wall Street lower.

The yen dipped briefly after the Bank of Japan widened its target band for the benchmark yield in a decision that was in line with market expectations.

The Federal Open Market Committee (FOMC) pledged this week to press on with aggressive monetary stimulus, saying a near-term spike in inflation would prove temporary amid their projections for the strongest U.S economic growth in nearly 40 years.

“After some navel gazing,” bond investors “concluded that the Fed is not (posing) any challenges or discomfort for longer-dated UST yields to keep pushing higher,” National Australia Bank’s senior FX strategist Rodrigo Catril wrote in a client note.

“The USD regained its mojo.”

The greenback was flat at 108.895 yen, adding to small gains overnight.

Following the BOJ’s decision to widen the target band for the 10-year Japanese government bond yield to 25 basis points around 0% from 20 basis points previously, the yen briefly weakened past 109 per dollar, before retracing all of that move.

“There’s no reason for dollar-yen to react to the latest results of the BOJ assessment because it’s almost in line with what the media reported in advance,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“For dollar-yen, U.S. Treasury yield change is a much more important driver than the JGB yield change.”

The euro was slightly weaker at $1.1915, extending Thursday’s 0.5% tumble.

While AstraZeneca vaccinations are poised to restart in Germany, France and other European nations, the region’s growth outlook was dinged as Paris went into a month-long lockdown.

The British pound sank 0.1% to $1.3913 after weakening 0.3% a day earlier, as the Bank of England warned the outlook for Britain’s recovery remained unclear, dampening some speculation the bank would signal a more confident outlook.

In the cryptocurrency market, bitcoin stood at around $57,800, as it seesawed after briefly topping $60,000 again overnight.

It had surged to a fresh record high of $61,781.83 on Saturday, after more than doubling since the start of the year.

“Bitcoin is a momentum trade and it feels like it could go a lot further,” said Edward Moya, a New York-based senior market analyst at online FX broker OANDA.

“Is it a bubble? Yes. But it can easily go to $100,000 before it comes crashing down.”

· EUR/USD advances above 1.1900 as US dollar eases with yields

EUR/USD trades above 1.1900, resuming the upside as the US dollar retreats in tandem with the Treasury yields. Plans to resume AstraZeneca’s COVID-19 vaccine underpin the common currency.

Euro/dollar remains depressed below the 50 Simple Moving Average on the four-hour chart and is well under the 100 and 200 SMAs, while momentum is to the downside. Overall, bears have the upper hand.

Support awaits at 1.19, the daily low, followed by 1.1880, a cushion seen earlier this week. It is followed by 1.1865 and by the 2021 trough of 1.1836.

Some resistance is at the daily high of 1.1920, followed by 1.1965, which capped a recovery attempt early in the week. The tough double-top of 1.1990 is a critical resistance line.

· Tracking coronavirus vaccinations and outbreaks in the U.S.

The United States reported a 22% decline in deaths from COVID-19 last week, while vaccinations accelerated to a record 2.4 million shots per day, according to a Reuters analysis of state, county and CDC data.

As of Sunday, 21% of the U.S. population has received at least one dose of a vaccine, up from 18% a week ago. About 11% has received two doses, up from 9%, according to the Centers for Disease Control and Prevention.

The number of new COVID-19 cases being reported each week has dropped for nine straight weeks, falling 10% to just under 378,000 in the seven days ended March 14. Deaths linked to COVID-19 dropped below 10,000 last week, the lowest since mid-November.

Nineteen out of 50 states reported more new infections last week compared with the previous seven days, up from 13 states in the prior week, according to the Reuters analysis. New Jersey, New York and Rhode Island had the highest rates of new infections per 100,000 residents.

The average number of COVID-19 patients in U.S. hospitals fell 13% to 38,000, the lowest since late October, according to a Reuters tally.

· U.S. health authorities warned Americans not to lower their guard, pointing to a resurgence in infections in several European countries after they relaxed social distancing measures.

“These should be warning signs for all of us. (U.S.) cases climbed last spring, they climbed again in the summer, they will climb now if we stop taking precautions,” said CDC Director Dr. Rochelle Walensky on Monday.

Air travel on Friday hit its highest level since the pandemic started, she said, as warmer weather prompted many people to go on spring break.

· European nations resume use of AstraZeneca Covid vaccine after regulator signs off

The European Medicines Agency has ruled that the AstraZeneca coronavirus vaccine is safe and effective, despite some concerns over possible side effects.

The announcement Thursday comes after more than a dozen EU nations halted the use of the AstraZeneca shot, which was developed with the University of Oxford, after around 30 cases of blood clots. A few other countries stopped using individual batches of the vaccine.

France, Germany, Italy, the Netherlands, Portugal, Spain and several other European nations now plan to resume use of the shot after the regulator’s OK.

· EU Commission president calls for reciprocity on vaccine exports: newspaper

· India's coronavirus infections touch highest in more than three months

India reported 39,726 new coronavirus cases on Friday, its highest in more than three months, as the worst-hit states, such as western industrialised Maharashtra, adopted fresh curbs to restrain the spread of the disease.

The tally of infections stands at 11.51 million, the highest after the United States and Brazil. Deaths rose by 154 to 159,370, data from the health ministry showed.

· Australia relieved after EU drug regulator backs AstraZeneca Covid-19 vaccine

· Austin on mission to deepen India-US ties, urged to raise Russia deal

Defense Secretary Lloyd Austin was urged by a senior U.S senator to convey Washington’s opposition to India’s proposed purchase of Russian air defence systems as he headed to New Delhi on Friday for talks aimed at deepening security ties.

· U.S., Chinese officials to hold second round of talks Thursday: U.S. official

U.S. and Chinese officials will begin their second round of talks starting at around 7:30 p.m. local time (0330 GMT) on Thursday that will likely last for several hours, a senior Biden administration official said.

The official said in a pool report distributed to reporters that the first session of talks was “substantive, serious, and direct,” running well beyond the two hours originally allotted.

“We used the session, just as we had planned, to outline our interests and priorities, and we heard the same from our Chinese counterparts,” the official said in the pool report, adding that a third session of talks was scheduled for between 9 and 9:30 AM local time on Friday.

· China calls on U.S. to avoid confrontation, seek win-win cooperation

Senior Chinese diplomat Yang Jiechi on Thursday called on China and the U.S. to properly handle differences, push forward bilateral cooperation and avoid confrontation at the start of the high-level strategic dialogue with the United States in Anchorage, Alaska.

· China’s Foreign Ministry: There was a lot of confrontation at Sino-US talks in Alaska

Market reaction

The downbeat remarks fail to have any impact on the AUD/USD pair, as it continues to benefit from the falling US dollar and the Treasury yields.

The spot was last seen trading at 0.7768, up 0.08% on the day.

· China's small tech firms step out of the shadows as giants reel from regulatory crackdown

One firm’s loss is another’s gain. China’s smaller technology companies and investors are eager to seize the day as a sweeping crackdown by anti-monopoly regulators on the country’s internet giants creates a wealth of new opportunities.

· Trade between Ireland and UK drops significantly in wake of Brexit

· UK to slow Covid vaccine rollout, PM Johnson says delay due to shipment from India's Serum Institute

· BOJ widens yield target band, pledges to buy risky assets only when necessary

The Bank of Japan on Friday widened the band at which it allows long-term interest rates to move around its target, as part of a raft of measures to make its ultra-easy policy more sustainable amid a prolonged battle to fire up inflation.

Following its two-day policy meeting, the central bank also removed its explicit guidance to buy exchange-traded funds (ETF) at an annual pace of roughly 6 trillion yen ($55 billion), which gives it more room to wind back its market stimulus.

Instead of buying at a set pace, the BOJ said it would buy ETFs only when necessary while maintaining a 12-trillion-yen ceiling for annual purchases.

· Japan's malls and restaurants brace for Olympics without foreigners

· BOJ tankan to show manufacturers' first-quarter mood improved: Reuters poll

Japan’s big manufacturers mood likely improved in the three months to March from the previous quarter and they see a further recovery ahead thanks to solid external demand and coronavirus vaccinations, a Reuters poll showed on Friday.

· BOJ Governor Kuroda's comments at news conference

The Bank of Japan on Friday widened the band at which it allows long-term interest rates to move around its target, as part of a raft of measures to make its ultra-easy policy more sustainable amid a prolonged battle to fire up inflation.

“Japan’s economy remains in a severe state due to the impact of the pandemic, but picking up as a trend ... It is expected to improve as a trend as the pandemic’s impact subsides.”

· Iran says to cold test redesigned Arak nuclear reactor

Iran will cold test its redesigned Arak nuclear reactor as prelude to fully commissioning it later in the year, Iran’s Atomic Energy Organization said on Friday.

· North Korea cuts ties with Malaysia in extradition row

Pyongyang says extradition of North Korean citizen from Malaysia to US "an unpardonable crime"

· Ousted Myanmar lawmakers eye ICC probe, more deaths reported after protests

The total number killed in weeks of unrest has risen to at least 224, the Assistance Association for Political Prisoners activist group said, noting another death in the commercial hub of Yangon and two in the cities of Monywa and Bago on Thursday.

· Myannmar security forces kill eight in Aungban town: Myanmar Now

Indonesia president urges halt to Myanmar violence, wants ASEAN talks

Indonesian President Joko Widodo on Friday called for bloodshed to be halted in military-ruled Myanmar and for Southeast Asian leaders to hold a high-level meeting to try to find a way out of the country’s escalating crisis.

· Oil extend losses amid gloomy demand outlook

Oil prices fell on Friday for a sixth day in a row, down nearly 9% for the week, as a new wave of COVID-19 infections in particular across Europe spurred fresh lockdowns and dampened hopes for an imminent recovery in fuel demand.

U.S. West Texas Intermediate (WTI) crude fell 4 cents, or 0.07%, to $59.96 a barrel by 0552 GMT.

Brent crude was down 10 cents, or 0.16%, to $63.18 a barrel.

· CRUDE OIL TECHNICAL ANALYSIS

WTI pierced below a rising trendline from October with swift momentum – see chart below. Having said that, the 50-day Simple Moving Average (SMA) and the 57.42 – 59.27 support zone stepped in to tame downside progress. Breaching these technical highlights may open the door to a deeper reversal in energy prices. But at the same time, this could be a turning point to perhaps revisit peaks from 2019 and 2020.

Reference: CNBC, Reuters, People's daily online, Independent, India Today, Straitstimes, DailyFX, AA.com