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Markets Unsettled, Dollar Rides High

Marc Chandler profile picture
Marc Chandler


  • The combination of OPEC+ decision not to boost output next month and Fed Chair Powell's seemingly lack of concern about the level of long-term rates pushed on a door that was already open.
  • German factory orders were nearly three times stronger than the 0.5% gain than the median forecast in the Bloomberg survey anticipated.
  • Although the US employment report is the single most important high-frequency data point, today's might be an exception.

Overview: The combination of OPEC+ decision not to boost output next month and Fed Chair Powell's seemingly lack of concern about the level of long-term rates pushed on a door that was already open. Oil is higher, yields are higher, most equity markets are lower, and the dollar has surged. The S&P 500 is practically flat for the year after yesterday's losses, and the NASDAQ is off nearly 10% from the record high set in the middle of last month. Most Asia Pacific markets fell, though Japan's Topix was a notable exception. Malaysia and Thailand equities also escaped the carnage. Europe's Dow Jones Stoxx 600 is off around 0.4%. It is the second day of losses, but it is still up a little more than 1% for the week. US futures indices are paring earlier losses. The US 10-year Treasury yield is near 1.55%. European benchmark yields are 1-3 bp higher, while Australian and New Zealand yields rose another 6-7 bp. Australia's 3-year bond yield, targeted at 10 bp, will finish the week a little above 15 bp. The dollar is riding higher. The euro fell to new lows for the year near $1.1915, and the dollar pushed above JPY108.50. The Antipodeans and sterling are leading the majors lower with 0.5%-0.7% declines. The JP Morgan Emerging Market Currency Index is falling for a third consecutive session and is at new lows for the year. Gold was is trying to stabilize after being sold below $1690. The $1700 may now offer resistance. April WTI jumped 4.2% yesterday on the back of OPEC+ surprise and is up another 2% today to push above $65 a barrel.

Asia Pacific

Weekly portfolio flows from the Ministry of Finance showed that Japanese investors have sold what appears to be a record JPY3.6 trillion (~$33.5) of foreign bonds

This article was written by

Marc Chandler profile picture
Marc Chandler has been covering the global capital markets in one fashion or another for 25 years, working at economic consulting firms and global investment banks. A prolific writer and speaker he appears regularly on CNBC and has spoken for the Foreign Policy Association. In addition to being quoted in the financial press daily, Chandler has been published in the Financial Times, Foreign Affairs, and the Washington Post. In 2009 Chandler was named a Business Visionary by Forbes. Marc's commentary can be found at his blog (www.marctomarket.com) and twitter www.twitter.com/marcmakingsense

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Comments (3)

Ben Gee profile picture
A stronger $ will not improve US trade balance.
Marc Chandler profile picture
@Ben Gee that is simply not true. First, we are not talking about much dollar appreciation on a real trade-weighted basis. Indeed, the dollar is softer than it was a year ago broadly speaking. Second, the key to US exports is not really about exchange rates, but foreign demand.
Ben Gee profile picture
China want to create 11 million jobs.
3.2% of GDP is about 3.25T Yuan or $500billion. China can create 11 millions jobs at $45000 (290K Yuan) per job with $500B (3.25T Yuan).
If Biden use the $1.9T stimulus to create jobs, he can create 19 millions jobs at $100K per job.
Just imagine how good US infrastructure be if the $1.9T is use to improve or fix US infrastructure.
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