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Sydney - The dollar continued to face headwinds in the wake of U.S. President Donald Trump’s denouncement of the greenback’s strength and championing of lower interest rates. Treasuries edged higher, compounding a retreat in yields which battered banking stocks.
Bloomberg’s Dollar Spot Index headed for a fourth day of declines after falling below its 200-day moving average on Wednesday. Lenders led the retreat as the Stoxx Europe 600 Index slid, and futures of the S&P 500 also pointed lower.
US Treasury yields also dropped a fourth day as European bonds gained across the board.
Big moves in the aftermath of Trump’s remarks, which also signaled a softening stance on China’s currency practices and took in the future of Fed chair Janet Yellen, added momentum to a jump in volatility across global stock markets.
After weeks of relative calm, traders are attempting to get a handle on the president’s unpredictable interventions, rising geopolitical risks, the end of easy central bank cash and key elections in Europe.
Lower volumes in the shorter trading week before Easter may have compounded the swings.
“Markets look distracted by a whole bunch of contradictory bluster,” Bill Blain, a strategist of Mint Partners in London, wrote in a note. “Let’s not forget we’re facing four days of closed markets. Most institutional investors and the banks have already bedded down their positions ahead of the holidays.”
Here’s what investors are watching:
JPMorgan, Citigroup and Wells Fargo & Co report on Thursday in the US, kicking off an earnings season for big banks. Analysts will listen carefully to what they have to say about the slowdown in commercial loan growth as well as the state of consumer lending amid worries over high levels of student and auto loan. Many markets will be closed tomorrow for the Easter holiday weekend.
Here are the main moves in markets:
Asia
Japanese shares fell for a third day, though they pared the day’s steepest losses as the yen erased an earlier gain. The Australian dollar jumped as employment surged more than expected in March, while South Korean stocks and the won continued a recovery.
Hong Kong stocks fluctuated after China’s overseas shipments last month jumped the most in two years as global demand held up.
Currencies
The Bloomberg Dollar Spot Index dropped 0.1% to the lowest since March 28 as of 11:49. The yen was little changed at ¥109.08/$, after gaining 0.3% earlier. The euro was 0.2% lower at 1.0639, falling for the first time in four days.
Stocks
The Stoxx Europe 600 index slid 0.5%. Futures on the S&P 500 Index fell 0.1%. The benchmark index closed Wednesday down 0.4%, while the Dow Jones Industrial Average fell 0.3%. The Chicago Board Options Exchange SPX Volatility Index, better known as the VIX, rose a fifth day.
Bonds
The 10-year US Treasury yield fell one basis point to 2.23%, after dropping six basis points to the lowest closing level since November 16 yesterday. German 10-year yields dropped two basis points to 0.18%.
Commodities
West Texas Intermediate dropped 0.1% to $53.06 a barrel, as a government report showed US output expanded to the highest level in more than a year, countering a decline in stockpiles from a record.
Gold slipped 0.1% to $1 285.91 an ounce after climbing for the past four days to the highest level in five months. Iron ore futures declined 1.1%. That’s after the benchmark spot price tumbled 8.5% on Wednesday, its biggest one-day slump since March 2016.
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