Dollar Maintains Strength as China Data Disappoints

 
Snapshot: 

        Dollar maintains strength; 10-year Treasury yield at 1.952%; U.S. stock futures edge lower; Brent crude at $59.54; gold at $1204.30
        -Watch for: no U.S. major data scheduled
        News: China Trade Data Point to Weak Growth; U.S. Widens Role In Yemen Conflict; Seoul, U.S. Split on North Korea Nuclear Threat
        In European currency markets Monday, the euro picked up slightly against the dollar following a sharp decline last week.
        The single currency was 0.2% higher at $1.0602. The U.K. pound was 0.1% lower against the buck at $1.4618.
        The dollar maintained its rising trend on Monday in Asia amid signs of a lackluster outlook for major economies such as China and Japan.
        Data released earlier in the day showed that China's exports slid 15% from a year earlier in March while imports dropped 12.7%, pointing to sluggish demand at home and abroad. The drop in exports was far below the median forecast of a 10.0% increase expected. The fall in imports was largely as anticipated.
        It has been a very slow start in the U.S. Treasury market ahead of a raft of major data releases this week, including retail sales on Tuesday and closely watched inflation data on Friday.
        Also this week, earnings season gets into full flow with JP Morgan, Wells Fargo, Bank of America, Citigroup and Goldman Sachs scheduled to release results. At 4.14am ET, the 10-year yield was 1.952%, off the 1.802% low seen in early April, and the June Treasury contract was 1/32 higher at 128-270.
        This week, the finance ministers and central bank governors of the world descend on Washington for the spring meetings of the World Bank and the International Monetary Fund.
        As always, there'll be lots of "bilateral" meetings aimed at resolving specific countries' problems - Ukraine and Russia, for example, and of course, Greece. Most important though, there's a new global macro context giving greater relevance than normal to these meetings, namely the fact that the dollar has surged over the past year as U.S. monetary policy has diverged from others.
        Whatever is said about that is likely to be carefully worded - officials don't want the market to keep treating the dollar as a one way upward bet but neither do they want to send a signal that might trigger a stampede out of the greenback.
        For Monday, stocks are likely to lack any impetus with no major economic data scheduled and no Federal Reserve officials due to speak.
        European stocks slipped Monday after data showing a slump in Chinese exports in March fanned concerns about growth in the world's second-largest economy, dampening some of the recent enthusiasm, analysts said.
        In commodities markets, Brent crude oil was 1.0% higher at $59.54 a barrel. Gold was little changed at $1,204.30 an ounce.
        GE's Industrial Business Is in the Spotlight
        With a pledge to divest its mammoth banking operation over the next two years, General Electric Co. has made the move investors have long wanted, and staked its future on jet engines, power turbines and oil services instead of finance.
        China Trade Data Point to Weak Growth
        Falling exports and a sharp drop in China's monthly trade surplus point to weak first-quarter economic results coming this week.
        U.S. Widens Role In Yemen Conflict
        The U.S. is expanding its role in Saudi Arabia's campaign in Yemen, vetting military targets and searching vessels for Yemen-bound Iranian arms amid growing concerns about the goals of the Saudi-led mission, according to U.S. and Arab officials.
        Seoul, U.S. Split on North Korea Nuclear Threat
        South Korea's vice defense minister on Monday dismissed an assessment from a senior U.S. military official that North Korea is able to mount a nuclear weapon on a missile that could threaten the U.S. mainland.
        China Moves to Strengthen Control Over Its Policy Banks
        China's government is strengthening control over the country's three major policy banks to position them better to support new initiatives to finance projects and corporate expansions abroad and to help stabilize growth at home.
        Japan Machinery Orders Fall
        Japanese core machinery orders fell 0.4% in February on a seasonally adjusted basis from the previous month, in a sign of continuing caution among Japanese companies over ramping up capital expenditure for future growth.
        BOJ Gov Kuroda Says Core CPI to Stay Around Zero
        Bank of Japan Gov. Haruhiko Kuroda said in his opening remarks to a meeting of the central bank's branch managers that the inflation rate will likely stay around zero near-term, although the economy is likely to continue its mild recovery.
        Write to paul.larkins@wsj.com
        (END) Dow Jones Newswires

        April 13, 2015 04:58 ET (08:58 GMT)

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