Dollar Dips, Aussie Rises on Inflation

 
Snapshot: 

        Dollar dips; 10-year Treasury yield at 1.895%; U.S. stock futures retreat; Nymex crude at $55.93; gold at $1203.30
        -Watch for: no major data scheduled; earnings from Coca-Cola, McDonald's, Boeing, Abbott Labs, Facebook, AT&T, eBay, Qualcomm
        News: Fed's Rate Decisions Hang on Dollar, Growth Concerns; Rosengren Says Fed Could Delay Rate Increases if Weakness Continues; PBOC Adviser Sees More Room to Cut Bank Reserve Ratio
        The euro was marginally stronger against the U.S. dollar in early European trade Wednesday, at around $1.0758.
        The bloc's single currency has had a bumpy ride over the last few sessions, largely as a result of concerns over the impact a potential Greek default may have on the euro.
        On Monday, Greece's government issued a decree requiring public bodies such as state-owned companies and public pension funds to transfer their cash reserves to the central bank as the country's cash reserves continue to dry up.
        Greek Prime Minister Alexis Tsipras is expected to meet with German Chancellor Angela Merkel at a summit in Brussels on Thursday, before eurozone finance ministers meet in Riga, Latvia, on Friday.
        A deal on fresh aid, however, is unlikely to be agreed before the Eurogroup meeting on May 11, a day before Greece must pay EUR780 million ($838 million) due to the International Monetary Fund.
        The dollar eased against the yen in Asia trade, after Japan's main stock market trimmed its earlier gains, action that limited selling of the Japanese currency. Meanwhile, the Australian dollar climbed on rising inflation.
        10-year Treasury yields were stuck in the middle of the 1.80%/2.00% trading band of the last month with little in the way of data to help guide the market.
        The gravitational pull of German Bunds was capping any Treasury yield upticks with the 10-year UST/Bund spread quoted at 180 basis points, off its recent high of 195 basis points but sharply higher than the 135 basis points level seen in mid-January.
        At 4.42am ET, the 10-year yield was 1.895% and the June contract was 5/32 higher at 129-160.
        The yield on Greece's two-year debt stood at just under 29%, while the yield on the 10-year hovered around 13.3%.
        The yield on the 10-year German government bond was at just under 0.1% in early trade Wednesday, having hit an all-time low of below 0.05% last week.
        U.S. stock futures fell as investors waited to assess quarterly figures from three Dow components, including McDonald's, as well as data on the key housing market.
        Futures for Dow Jones Industrial Average turned lower, losing 72 points, or 0.4%, to 17,807, and those for the S&P 500, swung down by 7.5 points, or 0.3%, to 2,084. Futures for the Nasdaq Composite also lost grip of gains, moving down 22 points, or 0.5%, to 4,407.50.
        Stock futures were seeing "consolidation ahead of more earnings results," said Fawad Razaqzada, technical analyst at Forex.com. "The S&P 500 has been touching this bearish trend line around 2,110 ... so the market is just waiting to see how the rest of the U.S. earnings will be like before deciding to push higher."
        More big-name results will come after the close of trading, with reports due from Facebook and EBay.
        A report on February house prices from Federal Housing Finance Agency is due at 9am ET. Then at 10am ET, the National Association of Realtors will release figures on sales of existing homes in March. Sales are expected to rise to a seasonally adjusted rate of 5.08 million, according to economists polled by MarketWatch.
        Oil prices fell in Europe, with investors bracing for key data on the U.S. oil supply and after tensions in the Middle East eased with Saudi Arabia halting its military operation in Yemen.
        Brent crude for delivery in June fell 0.8% to $61.58 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, June-dated light, sweet crude futures fell 1.2% to $55.93.
        Gold, considered a safe asset in volatile times, was largely unchanged on the day at $1,203.30 per troy ounce.
        Fed's Rate Decisions Hang on Dollar, Growth Concerns
        The strong U.S. dollar and an unsteady global economy are emerging as primary concerns for Federal Reserve officials as they prepare for a policy meeting next week to consider the timing of the first interest-rate increase since before the financial crisis.
        Rosengren Says Fed Could Delay Rate Increases if Weakness Continues
        The Federal Reserve may need to delay interest-rate increases if economic data don't pick up in the months ahead, Eric Rosengren, President of the Federal Reserve Bank of Boston, said in an interview with The Wall Street Journal.
        PBOC Adviser Sees More Room to Cut Bank Reserve Ratio
        China has more room to lower its reserve-requirement ratio for banks after its one-percentage-point cut this week, a central bank adviser said Wednesday.
        Japan Logs Trade Surplus After Nearly Three Years
        Japan reported its first monthly trade surplus in nearly three years Wednesday, as falling oil prices reduced the value of imports while a weaker yen and the U.S. economic recovery lifted outbound shipments.
        Germany Raises Growth Forecasts
        Germany is more optimistic about its economic growth outlook because private consumption is strong and unemployment levels are low, reinforcing the country's stance as Europe's economic powerhouse.
        Australia Inflation Rises in the 1st Quarter
        Australian consumer prices rose 0.2% in the first quarter from the fourth, and were up 1.3% from a year earlier, the Australian Bureau of Statistics said Wednesday.
        China Unveils Rules to Open Up Card-Clearing Business
        China unveiled detailed rules Wednesday that allow domestic and foreign companies to set up bank card-clearing operations, a sector long dominated by the state.
        Write to paul.larkins@wsj.com
        (END) Dow Jones Newswires

        April 22, 2015 06:31 ET (10:31 GMT)

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