· Dollar hovers near two-week low after U.S. yields slip
The dollar hovered near two-week lows after U.S. bond yields eased from recent highs, while market participants waited for the Federal Reserve’s meeting minutes due later in the session to help determine the future path for the dollar.
The previous quarter saw a spike in U.S. Treasury yields and the dollar’s strongest rally in years, on rising expectations that accelerating U.S. economic growth and inflation could force the Fed to abandon its pledge to keep interest rates near zero until 2024.
The bond market has stabilised so far this week, with the 10-year U.S. Treasury yield at 1.64%, down from its peak of 1.776% at the end of March.
At 0716 GMT, the dollar was at 92.368 against a basket of currencies, close to a two-week low, having fallen from its recent high of 93.439, which it hit on March 30.
Market participants were waiting for the Fed meeting minutes, due to be released later in the session, for hints about the Fed policymakers view on rising yields.
U.S. money markets are pricing in a 25 basis point hike in December 2022.
Euro-dollar was steady at $1.18705, having strengthened so far in April.
· US markets shift to price in Fed rate rise next year
Markets have already shown a willingness to see through the Fed’s cautious rhetoric to speculate that a quickening pace of inflation will demand a pivot in recent weeks, pushing the US Dollar higher alongside yields. A view to a larger fiscal tailwind may revive this dynamic, weighing on gold prices.
· EUR/USD to plunge towards 1.15 in the second quarter as dollar's strength lingers – Credit Suisse
Economists at Credit Suisse expect the EUR/USD pair to remain in a mild downtrend while there is an asymmetry to further rate differential widening. Their expected Q2 range is 1.14-1.21 and they like to sell rallies towards 1.20.
· Treasury yields ebb lower ahead of Fed meeting minutes
U.S. Treasury yields ebbed lower on Wednesday morning, ahead of the release of minutes from the Federal Reserve’s recent monetary policy meeting.
The yield on the benchmark 10-year Treasury note fell to 1.635% at 3:40 a.m. ET. The yield on the 30-year Treasury bond dipped to 2.302%. Yields move inversely to prices.
· For the second time, China has ‘fared well’ in a major crisis: IMF
China’s response to the coronavirus pandemic has been impressive, an International Monetary Fund official told CNBC on Tuesday, adding that it had once again managed to do well when faced with a major crisis.
The Chinese economy managed to end 2020 — the year in which the coronavirus pandemic brought most of the global economy to a halt — in positive territory.
Its GDP (gross domestic product) came in at 2.3% last year and is expected to expand by 8.4% by the end of 2021, according to the IMF. This means that China’s economy has not been as severely hit by the Covid-induced shock as much of the rest of the world.
· CDC Warns More Transmissible UK COVID Variant Detected in Every US State
· Oxford pauses COVID-19 vaccine study in kids, awaits more data on blood clot issues
The University of Oxford said on Tuesday it had paused a small UK trial testing the COVID-19 vaccine it developed with AstraZeneca Plc in children and teenagers, as it waits for more data on rare blood clotting issues in adults who received the shot.
· UK begins rollout of Moderna COVID vaccine
Britain begins rolling out Moderna’s COVID-19 vaccine on Wednesday in Wales and expects to be using it in the rest of the United Kingdom in the coming days in a boost to the country’s health system after supplies of shots started to slow.
· EMA official sees clear ‘association’ between AstraZeneca shot and rare blood clots in brain
A senior official at Europe’s medicines regulator has said there is a clear “association” between AstraZeneca’s Covid-19 vaccine and very rare blood clots in the brain, though the direct cause of the clots is still unknown.
· German finance chief says Covid surge shows now is not the time to reopen economy
· Pandemic drives Germany to highest deficit in 30 years: statistics office
Germany’s public sector deficit reached 189.2 billion euros ($225 billion) in 2020 thanks to the coronavirus pandemic, the first deficit since 2013 and the highest budget shortfall since German reunification three decades ago, the Statistics Office said.
· Japan fears COVID-19 variants are behind possible fourth wave
Japanese health authorities are concerned that variants of the coronavirus are driving a nascent fourth wave in the pandemic with just 109 days remaining until the Tokyo Olympics.
The variants appear to be more infectious and may be resistant to vaccines, which are still not widely available in Japan. The situation is worst in Osaka, where infections hit fresh records last week, prompting the regional government to start targeted lockdown measures for one month from Monday.
· Governor of Japan's Osaka to cancel Olympic torch relay on prefecture streets
· Japan's Osaka cancels Olympic torch run, declares COVID-19 medical emergency
· South Korea reports 668 new coronavirus cases, highest daily count in three months
South Korea on Wednesday reported 668 new coronavirus cases for Tuesday, the highest daily count since Jan. 8 amid a rise in cluster infections, the Korea Disease Control and Prevention Agency (KDCA) said.
· Vaccines are a national priority but not ‘silver bullets’ for reopening, Singapore minister says
· Goldman Sachs downgrades India’s growth forecast as Covid cases spike
The investment bank on Tuesday lowered India’s growth forecast for the April-June quarter from 33.4% year-on-year previously, to 31.3%.
Indiareported more than 103,000 new cases over a 24-hour period on Monday, which surpassed levels seen in September when the first wave of infection reached its peak.
Tuesday’s numbers stood over 96,000.
· India posts record COVID-19 cases, 13-fold jump over two months
India’s second wave of coronavirus infections continued to swell as it reported a record 115,736 new cases on Wednesday, a 13-fold increase in just over two months and raising pressure on the government to expand its vaccination campaign.
· 'A biological Fukushima': Brazil COVID-19 deaths on track to pass worst of U.S. wave
Brazil’s brutal surge in COVID-19 deaths will soon surpass the worst of a record January wave in the United States, scientists forecast, with fatalities climbing for the first time above 4,000 in a day on Tuesday as the outbreak overwhelms hospitals.
· Israel attacks Iranian command ship in Red Sea: Report
US official tells New York Times that Israel said mine attack was retaliation for earlier Iranian strikes on Israeli vessels
· Five killed in Myanmar as troops open fire on protesters
More than 580 people have been killed, according to an activist group, in the turmoil in Myanmar since a Feb. 1 coup that ended a brief period of civilian-led democracy. Nationwide protests and strikes have persisted since then despite the ruling military’s use of lethal force to quell the opposition.
· Oil prices rise on stronger economic outlook, U.S. stockpile draw
Oil prices edged higher on Wednesday on the prospects for stronger global economic growth amid increased COVID-19 vaccinations and a report that crude inventories in the United States, the world’s biggest fuel consumer, fell.
But optimism about talks between the United States and Iran over Iran’s nuclear programme and an impending increase in supply by major oil producers capped gains.
Brent crude futures for June rose by 16 cents, or 0.3%, to $62.90 a barrel by 0657 GMT while U.S. West Texas Intermediate crude for May was up 14 cents, or 0.2%, to $59.47.
“Optimism on the global economic outlook boosted sentiment in the crude oil market,” analysts from ANZ bank wrote in a note on Wednesday.
Optimism on a wider rollout of vaccines also boosted prices with U.S. President Joe Biden moving up the COVID-19 vaccine eligibility target for all American adults to April 19.
U.S. crude oil stockpiles fell more than expected in the week ended April 2, while fuel inventories rose, according to three market sources, citing American Petroleum Institute (API) figures ahead of government data on Wednesday.
Oil production in the U.S. is expected to fall by 270,000 barrels per day (bpd) in 2021 to 11.04 million bpd, the Energy Information Administration (EIA) said on Tuesday, a steeper decline than its previous monthly forecast for a drop of 160,000 bpd.
Reference: CNBC, Reuters, FARS News AGENCY, Middle East Eye, FXStreet
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