Dollar Dips as Focus Turns to Fed Minutes

 
Snapshot: 

        Dollar dips; 10-year Treasury yield at 1.875%; U.S. stock futures edge higher; Brent at $58.36; gold at $1210.90
        -Watch for: FOMC meeting minutes and economic forecast; earnings from Family Dollar, Alcoa, Bed Bath & Beyond
        News: Bank of Japan Votes Down Call to Slash Easing; Eurozone Retail Sales Fall After Four Straight Monthly Rises; German Manufacturing Orders Fall
        In European currency markets Wednesday, the euro strengthened 0.4% against the dollar to $1.0861.
        The single currency has steadied after plunging to a 12-year low last month. The pound also rose 0.4% against the buck to $1.4883.
        The yen rose against the dollar in Asia after the Bank of Japan held policy steady, sticking to its majority view that it is still on track to achieve its 2% inflation, despite price rises having apparently stalled.
        Junichi Ishikawa, market analyst at IG Securities in Tokyo, said the yen appreciated somewhat on disappointment by some who had expected a surprise round of fresh easing.
        U.S. Treasurys rallied into the U.S. close Tuesday, boosted by a strong 3-year auction, and momentum continued in Europe as core fixed income markets pushed higher.
        Worries over the ongoing Greek debt negotiations were underpinning the risk-off bid while Wednesday's release of the March 17/18 FOMC minutes will be closely watched.
        At 4.43am ET, the June Treasury contract was 4/32 higher at 129-155 and the 10-year cash yield was 1.875%.
        Stock futures rose ahead of the opening bell, with BP among the premarket gainers after a mega oil deal was announced in London, while investors also looked ahead to the latest minutes of the Federal Open Market Committee meeting.
        Wednesday also marks the unofficial kickoff of earnings season, with Alcoa due to report.
        Futures for the Dow Jones Industrial Average rose 40 points, or 0.2%, to 17,821, while those for the S&P 500 index added 4.45 points to 2,072.25. Futures for the Nasdaq-100 index inched up 7 points to 4,340.50.
        "Last night New York seemed to start to get the message that limited growth prospects, resulting in interest rate hikes remaining on hold, may call a halt to a sustained stock-market rally, especially if this quarter's earnings, which start tonight with Alcoa's results, are not that stellar," said David Buik, market commentator at Panmure Gordon, in a note.
        The energy sector was expected to be back in focus on Wednesday. Oil prices were under pressure after more signs of rising inventory and record crude production out of Saudi Arabia.
        In a sign of how lower oil prices are shaking up the industry, Royal Dutch Shell said it would buy BG Group in a deal worth nearly $70 billion. U.S.-listed shares of Shell fell nearly 5% in premarket, but shares of rose nearly 4% as the deal was expected to trigger more consolidation speculation in the industry.
        The minutes of the Federal Open Market Committee's March meeting will be released at 2pm ET. Nour Al-Hammoury, chief market strategist at ADS Securities, said because the minutes won't cover the recent weak jobs report, a change in guidance isn't likely. Therefore the report could turn into a "nonevent", he said in a note.
        Several Federal Reserve speakers are also on tap: New York Fed President William Dudley is due to be interviewed by Reuters, then Fed Gov. Jerome Powell will speak on challenges for monetary policy at the Council on Foreign Relations in New York at 8am ET.
        In commodities markets, Brent crude oil was 1.3% lower at $58.36 a barrel, slipping back from big gains earlier in the week. Gold was steady at $1,210.90 an ounce.
        China Aims to Soothe Labor Unrest
        Manulife, DBS Near Bancassurance Deal for Asia
        Repo Market Sees a Lending Shift as Rules Bite
        Shell to Buy BG Group for $70 Billion
        Petroleum giant Royal Dutch Shell has agreed to buy BG Group for $69.6 billion in cash and shares, the latest sign of how tumbling energy prices are shaking up the global oil-and-gas industry.
        European Stocks at Record High
        European stocks surpassed a record high Wednesday, with the energy sector thrust in the spotlight after Royal Dutch Shell PLC agreed to take over BG Group PLC in the largest energy industry deal this year.as BG-Shell deal ignites energy shares
        Eurozone Retail Sales Fall After Four Straight Monthly Rises
        Retail sales in the eurozone fell in February after four successive monthly increases, an indication that the boost to the spending power of households from lower oil prices may be waning.
        German Manufacturing Orders Fall
        German manufacturing orders fell by 0.9% in February, missing forecasts, as a lack of foreign and bulk orders hurt the index.
        Bank of Japan Votes Down Call to Slash Easing
        The Bank of Japan on Wednesday kept its policy on hold, but the toughest critic of BOJ Gov. Haruhiko Kuroda made a series of new proposals to almost halve the current easing measures, the latest sign of growing tension among policy makers at the bank.
        Japan Logs Biggest Current Account Surplus Since 2011
        Japan posted its biggest current account surplus in almost three and a half years in February, the finance ministry said, helped by the higher value in yen terms of income from overseas investments and a smaller trade deficit.
        Repo Market Sees a Lending Shift as Rules Bite
        Investors and small firms are entering the $2.6 trillion U.S. repo market, taking advantage of banks' retreat from a key corner of the credit markets.
        Bank of Russia Sees No Ruble-Related Risks to Financial Stability
        The Bank of Russia sees no risks to financial stability from volatility in the ruble, which has firmed to levels last seen in late December, the head of the monetary policy department at the bank said on Wednesday.
        Russia Central Bank: Inflationary Expectations Stabilizing
        Inflationary expectations in Russia have started to stabilize, the central bank monetary policy chief said Wednesday, underpinning expectations that more rate cuts are in the pipeline.
        Australia, China Extend Currency-Swap Deal
        The Reserve Bank of Australia and the People's Bank of China extended a local-currency-swap agreement worth A$40 billion.
        Write to paul.larkins@wsj.com
        (END) Dow Jones Newswires

        April 08, 2015 06:13 ET (10:13 GMT)

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