Headlines – International
The U.S. Supreme Court curbed the president’s power to appoint someone to fill a top government post temporarily while the person is awaiting Senate confirmation to do the job permanently.Voting 6-2, the court ruled that under a 1998 law nominees can fill a position on an acting basis only if they were previously serving for 90 days as the top assistant to the post.The Supreme Court Tuesday upheld that decision, with Chief Justice John Roberts writing the majority opinion. Justices Sonia Sotomayor and Ruth Bader Ginsburg dissented.
The euro rose to the strongest in more than a month after a French presidential debate eased concern about a populist win in the election.Euro strengthened against all of its 10 major peers after a poll showed independent candidate Emmanuel Macron emerged as the most convincing of the five contenders in the national debate, ahead of Le Pen.
U.K. inflation accelerated in February, breaking through the Bank of England’s target for the first time in more than three years.The 2.3 percent increase in the consumer prices index was the fastest since September 2013 and above the median prediction for 2.1 percent. The rate is up from just 0.3 percent a year ago, reflecting sterling’s 17 percent drop since the Brexit vote in June, as well as an increase in oil prices.
Australia’s central bank highlighted threats in the property market and an acceleration of domestic household debt even as it lent credence to the global reflation story.Government data Tuesday showed Australian house prices rose 4.1 percent in the fourth quarter of last year, from the previous three months. That’s the highest quarterly increase since mid-2015. The Reserve Bank of Australia said in minutes released yesterday,data continued to suggest that there had been a build-up of risks associated with the housing market and growth in household debt had been faster than that in household income.The RBA also noted the unusual correlation of growth and inflation worldwide as the U.S. and Chinese economies remain strong and even Japan and Europe grow faster than their traditional speed limits.
China’s central bank injected hundreds of billions of yuan into the financial system after some smaller lenders failed to make debt payments in the interbank market.China’s smaller lenders faced tighter liquidity this week as benchmark money market rates climbed to the highest level since April 2015, reflecting a mix of technical factors including cash hoarding for quarter-end regulatory checks.By letting borrowing costs rise, the People’s Bank of China may have been sending a warning to over-leveraged lenders and also Central bank allowed short-term jumps in money market rates to discourage excessive borrowing.
Market in Details
The Bloomberg Dollar Spot Index slipped by 0.3 percent, following a 0.1 percent drop Tuesday.
EUR/USD was up by 0.7 percent at $1.0812, rising versus all of its G-10 peers except sterling as Marco emerges as the most convincing in French debate yesterday.
The pound was Tuesday’s best performer versus the dollar after a report showed U.K. inflation beat estimates to rise above the Bank of England’s target for the first time in more than three years. Sterling climbed to $1.2472, its highest level since Feb. 27.
USD/JPY fell to fresh low 112.08 as the dollar took on a more defensive tone and as its woes were further exacerbated by a drop in the 10-year Treasury yield.
USD/CAD dips to 1.3285, setting a fresh session low after data released. Canada retail sales for January surge 2.2%, most since March 2010.
The yield on 10-year Treasury notes fell three basis points to 2.43 percent after earlier rising by four basis points. The rate is down 11 basis points in the past three sessions.
The U.S. bond rally pushed the yield advantage on 10-year U.S. Treasuries over German debt to the narrowest level in more than four months.
The yield on 10-year German government bonds rose two basis points to 0.46 percent.
U.S. equities posted their biggest decline since before the presidential election as financial shares dropped on double the average volume and bonds rallied for the fifth time in six sessions. S&P 500 Index lost 1.2% to 2,344.02, lowest since February.Dow Jones erased 175 points to 20,731 and the Nasdaq Composite dropped 1.3.Tech stocks that led in early trading reversed gains, with the group down 0.8%.Financial companies down 2%, on pace for worst day in two months.
European stocks fell the most in a month as commodity producers tracked losses in steel and copper prices.Stoxx 600 down 0.5% at the close.Dax down 0.8% at 11,962.13.FTSE 100 down 0.7% at 7,378.34.Stoxx Banks SX7P up 0.1% at 178.01.S&P 500 down 0.9% at 2,352.8.
The MSCI Emerging Market Index halted a seven-day advance that was the longest rally since August.
West Texas Intermediate oil fell 1.8 percent to settle at $47.34 before U.S. inventory data on Wednesday and as Libya prepared to restart crude shipments from major ports.
Copper slumped 1.8 percent to finish at $5,776 a metric ton in London, amid signs supplies are returning. Disruptions caused the metal to surge last month to the highest level since 2015.
Gold dropped 0.1 percent to $1,233.68 an ounce, after four days of gains.