The US dollar is little changed against the major currencies as yesterday’s moves are consolidated and traders wait for fresh developments. Global equities were higher after Wall Street’s advance yesterday. Asia-Pacific bond yields were firm, following the US lead, but European 10-year benchmark yields are lower, led by the continued rally in Greek bonds after an agreement was struck that will free up a tranche of aid.
‘As President of the United States of America, I express my profound apologies for the sufferings inflicted on the people of Hiroshima and Nagasaki by the atomic bombings’. These, of course, are the words that we are not going to hear Barack Obama speak in Hiroshima on 27 May, when he becomes the first sitting US president to visit the city since the atomic bombings in August 1945.
The US dollar lost momentum yesterday but has regained it today. The euro has been pushed through last week’s lows near $1.1180. The next immediate target is $1.1145, which corresponds to the lower Bollinger Band today, though the intraday technical readings suggest some modest upticks are likely first. The $1.1200-$1.1220 area may cap upticks.
Despite occasional reasons to be optimistic, relations between China and Japan have been consistently poor over recent years.
Diseases such as Ebola, Zika, and AIDS have long sent shivers down the spines of people around the world thanks to their virulence and capacity for contamination. Many popular television shows and movies have pondered the potential social consequences of such an outbreak, but few think about the potential financial consequences of these illnesses.
Chinese Foreign Minister Wang Yi’s whirlwind tour of Brunei, Cambodia and Laos during 22–24 April 2016 courted support for his country’s territorial claims in the South China Sea. However, the issue of China’s policy in the South China Sea has created a fault line across ASEAN, complicating the unity and effectiveness of the regional grouping.
The capital markets are off to a mixed start to start the last week of the month. Asian shares were mostly higher, though the Nikkei shed 0.5%. European shares are also higher, extending the three-week high seen last week.
The US dollar’s weakness in recent months, despite negative interest rates in Europe and Japan likely had many contributing factors. These factors include shifting views of Fed policy, weaker US growth, the recovery in commodity prices, including oil, gold and iron ore, and market positioning.
The combination of stronger US economic data and signals from the Federal Reserve that it is looking to continue the normalization process helped the dollar extended its recovery. The dollar posted a significant technical reversal against many of the major currencies on May 3. The Dollar Index rose for its third week, as the greenback climbed against all the major currencies but sterling (+0.9%).
The new normal. EPA/Lukas Coch
Tobacco kills nearly half of all long-term smokers and in the UK alone accounts for the deaths of 100,000 people annually, according to the public health charity ASH. This is the harsh reality behind plain packaging for tobacco, which comes into force in the UK on May 20 2016.
