Broadly Stronger Dollar in Wake of Yellen’s Press Conference

March 20, 2014

The dollar shows overnight advances of 1.4% against the Swiss franc, 1.3% versus the kiwi, 1.2% vis-a-vis the euro and Australian currency, 0.9% against the loonie, 0.8% versus sterling, 0.7% against the yen, and even 0.6% relative to the Chinese yuan.

Share prices fell by 2.5% in Indonesia, 1.8% in Hong Kong, 1.7% in Japan, 1.6% in China, 1.2% in Australia, 0.9% in South Korea, 0.8% in Singapore and 0.4% in India.  Equity losses so far today in Europe amount to 0.9% in the British Ftse and German Dax, 0.7% in the Paris Cac and Spanish Ibex, 0.4% in the Zurich SMI, but just 0.1% in the Milan MIB.

Gold and WTI oil prices are 1.0% and 0.4% lower at $1,327.90 per ounce and $100.01 per barrel.

The 10-year British gilt yield is 8 basis points higher, but the German bund is unchanged.  And the Japanese JGB slipped back a basis point.

In surprisingly full answers, Fed Chair Yellen suggested that the onset of a rising federal funds target may occur in the spring of 2015, sooner than markets were assuming.  Today is the first day of spring 2014.

The Swiss National Bank’s quarterly monetary policy review left the franc’s target ceiling against the euro unchanged at 1.2000.  That level’s been targeted since September 2011.  Three-month Swiss Libor will be kept in a range of 0.0-0.25%.  Projected future inflation was revised marginally downward by authorities.

German producer prices stagnated in February after ticking up 0.1% in December and down 0.1% in January.  The PPI posted a 0.9% decline from February 2013, with the energy component falling by 2.6%.

The monthly U.K. industrial trends survey compiled by the Confederation of British Industries printed at +6 in March, a bit less than expected but twice the size of February’s score.  In the final five months of 2013, this volatile data series had ranged from minus 4 in October to +12 in December.

Italy’s current account deficit narrowed from EUR 4.057 billion in January 2013 to a gap of EUR 1.255 billion in the first month of this year.

The Swiss trade surplus in February of CHF 2.616 billion was somewhat greater than analyst expectations and 2.6% wider than in January.

Dutch consumer confidence rose three points to a reading of minus 7 in March.  Dutch unemployment in February also rose, printing at 8.8% after 8.6%.

Danish retail sales recorded on-month and on-year increases in February of 0.6% and 0.7%.

GDP in New Zealand grew 0.9% in the final quarter of 2013, which matched expectations but was slower than in 3Q.  Fourth-quarter GDP was 3.1% greater than a year before.  For calendar 2013, the growth rate was 2.5%.

Japanese stock and bond transactions generated a 330 billion yen net capital outflow last week versus a JPY 827 billion inflow in the week of March 8.

Bank of Japan Governor Kuroda again express confidence that core CPI inflation will touch the goal of 2.0% sometime before April 2015.

CPI inflation in Hong Kong decelerated to 3.9% last month from 4.6% in January.

Scheduled U.S. data releases today are the Philly Fed manufacturing index, the Conference Board’s index of leading economic indicators, existing home sales, and weekly jobless insurance claims.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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