FOREX: USD Recoups Earlier Losses As Equity Futures Weaken, US Yields Rise
Apr-02 01:04
Aggregate G10 shifts are not large in the first part of Wednesday trade. The USD BBDXY index was last near 1273.7, little changed for the session.
- We had a slightly risk-on tone in the first part of dealings, as US equity futures re-opened higher. Sentiment may have been aided by reports from the US that the tariff announcement later today would represent a cap on tariff levels and that they could come down if countries took steps (per reported remarks by US Tsys Secretary Bessent).
- This was short lived though, with US equity futures now back in the red. Regional equity markets, which are open, are mostly down at this stage, led by Japan losses.
- USD/JPY is still slightly higher though, despite the softer equity tone. We were last 149.85/90, up around 0.20%. EUR/USD is back under 1.0800. Earlier highs were at 1.0808. US yields are firmer in the first part of Wednesday trade, the 10yr up 2bps to 4.19%.
- The Fed's Goolsbee warned of a tariff-induced pullback in spending in an earlier Fox News interview (see this BBG link).
- AUD and NZD sit off earlier high, albeit more so for AUD. The A$ was last 0.6275/80. RBA Assistant Governor Kent spoke earlier about changes to monetary policy implementation, with OMOs to change. However, the stance of monetary policy will not be impacted.
- NZD/USD was last near 0.5700/05, still slightly up for the session.
- The data calendar is light for the remainder of today's Asia Pac session.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
ASIA: Vietnam PMI up Marginally in February.
Mar-03 00:50
- Vietnam’s February Manufacturing PMI rose to +49.2 from 48.9 in January.
- Output was down at +48.9 from +49 in the month prior with new orders falling.
- This was the third month consecutively that PMI Manufacturing has contracted with new orders the lowest reading since third quarter 2024.
MNI: AUSTRALIA Q4 BIZ INDICATORS INVENTORIES +0.1%
Mar-03 00:30
- MNI: AUSTRALIA Q4 BIZ INDICATORS INVENTORIES +0.1%
- AUSTRALIA Q4 BIZ INDICATORS GROSS OP PROFITS +5.9%
LNG: Gas Prices Lower Heading Towards Spring
Mar-03 00:23
Natural gas prices were lower on Friday. European gas fell 1.9% to EUR 44.30 to be down 16.6% in February as hopes rose of more flexible EU refilling regulations ahead of next winter and the weather warmed. There were also nascent hopes of a peace deal for Ukraine that would allow Russian gas flows through Ukraine again. Prices troughed late in February at EUR 41.09.
- The argument between the White House and President Zelensky makes a peace deal for Ukraine less likely, but the meeting between the latter and the EU appears to have been tentatively more promising with plans to increase Ukraine’s defences and for a month-long ceasefire at sea and in the air. UK PM Starmer has said he will discuss the results with US President Trump. Zelensky has also said he’s prepared to sign the natural resources deal with the US, which includes energy.
- US gas fell 2.9% to $3.82 on Friday but was still over 24% higher last month. It reached a peak of $4.35 on February 20 and trended lower to month end. Prices had been supported by increased heating demand from a cold snap but the forecast for much of the US is showing above-average temperatures in the second week of March, while the West Coast is likely to see cooler weather, according to Maxar.
- US lower-48 gas production rose 2.9% y/y on Friday while demand fell 10.7% y/y.
- North Asian gas demand has been robust due to colder weather after a mild start to the heating season.
