Aust dollar soars as greenback slips

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Cautious remarks from the US Federal Reserve have helped the Australian dollar break above US76c.

At 7am (AEDT) on Wednesday, the local unit was trading at US76.41c, up from US75.41c on Tuesday.

The Aussie spiked one US cent overnight after Fed Chair Janet Yellen doubled down on her dovish comments, ANZ senior FX manager Sam Tuck said.

Dr Yellen said the US central bank still envisions a gradual pace of interest rate increases in light of global pressures that could weigh on the US economy.

“She stated not only was caution in normalisation exceptionally warranted at the moment, but also that the Fed has room to add stimulus,” he said.

Westpac economists said the remarks pared back expectations of upcoming tightening, which dragged the greenback lower.

“Such a cautious stance suggests a rate hike in April is unlikely, and there may now even be question marks regarding June,” they said.

Source: businessspectator           

Oil futures log 5th straight drop to settle at a two-week low

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Oil futures fell for a fifth straight session on Tuesday to settle at their lowest level in two weeks, as traders braced for industry data that are likely to show another increase in U.S. crude supplies.

West Texas intermediate crude for May fell $1.11, or 2.8%, to settle at $38.28 a barrel on the New York Mercantile Exchange. The settlement was the lowest since March 15. May Brent crude on the ICE Futures exchange declined by $1.13, or 2.8%, to $39.14 a barrel.

WTI oil was trading even lower at around $38.19 before Fed Chairwoman Janet Yellen’s speech to the Economic Club of New York. She defended the central bank’s decision to move cautiously on interest-rate hikes pointing to shaky global economies.

Commodities priced in dollars can find support from a weaker dollar, as a decline in the U.S. unit can boost the attractiveness of those commodities to holders of other currencies.

WTI crude prices were trading nearly 14% higher for the month, buoyed by expectations that members of the Organization of the Petroleum Exporting Countries and other key producers will agree on a plan to stabilize output when they meet on April 17 in Doha, Qatar.

Source: Marketwatch

Asia Stocks Rise as Yellen Dovish Comments Lift Risk Appetite

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Asian stocks advanced after Federal Reserve Chair Janet Yellen signaled the U.S. central bank remains wary of raising interest rates while threats remain to domestic growth from a slowing global economy.

The Topix index fell in Tokyo after Yellen’s comments strengthened the yen, souring the outlook for Japanese exporters.

The MSCI Asia Pacific Index gained 0.5 percent to 128.34 as of 9:03 a.m. in Tokyo. The measure is on course to post its largest monthly advance since October, climbing 7.7 percent to pare its quarterly loss to 2.7 percent. It is appropriate for U.S. central bankers to “proceed cautiously” in raising rates because the global economy presents heightened risks, Yellen said in a speech to the Economic Club of New York. The yen traded at 112.71 after strengthening 0.7 percent Tuesday.

Yellen’s comments helped the Standard & Poor’s 500 Index rise 0.6 percent, its biggest jump in more than two weeks, erasing this year’s losses. E-mini futures on the gauge added 0.1 percent percent.

Traders are now pricing in no chance of a U.S. rate increase in April, while odds for June slid to 28 percent from 38 percent on Monday. The probability of higher borrowing costs doesn’t rise above 50 percent until November.

Japan’s Topix index dropped 0.5 percent. Australia’s S&P/ASX 200 Index climbed 0.7 percent. South Korea’s Kospi index rose 0.5 percent and New Zealand’s S&P/NZX 50 Index added 0.3 percent. Markets are yet to open in Hong Kong and China.

Source : Bloomberg

Japanese Stocks Fall as Yen Strengthens After Yellen Speech

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Japanese stocks fell, paring the Topix index’s first monthly advance since November, as the yen strengthened after Federal Reserve Chair Janet Yellen voiced caution on raising interest rates given the risks to world growth.

The Topix declined 0.3 percent to 1,373.16 at 9:01 a.m. in Tokyo, with all but six of the 33 industry groups sinking. The measure is on course for a 5.7 percent gain in March. The Nikkei 225 Stock Average retreated 0.3 percent to 17,057.89. Yellen said it’s appropriate for U.S. central bankers to “proceed cautiously” in raising rates amid deteriorating world growth. The yen gained 0.7 percent on Tuesday, halting its longest losing streak since October, and traded little changed at 112.62 per dollar today.

Futures on the Standard & Poor’s 500 Index added 0.1 percent. The underlying U.S. equity gauge jumped the most in two weeks to erase losses for the year following Yellen’s speech. Traders see zero chance of the Fed raising rates in its April meeting, while the probability of a rate hike in June was at 28 percent, down from 46 percent a week ago.

Prime Minister Shinzo Abe said Tuesday that the best way to boost the economy is to quickly implement the existing budget for the next fiscal year, rejecting speculation he would announce a supplementary spending package.

Speaking after the parliament passed a record 96.7 trillion yen ($850 billion) in outlays for the 12 months starting April 1, Abe brushed off suggestions the government may announce another 10 trillion yen of fiscal stimulus. He reiterated that Japan will go ahead with a plan to increase the sales tax next year, barring a major economic shock.

Source : Bloomberg

Hong Kong Share Indexes Barely Move Ahead of Yellen Speech (review)

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Hong Kong stocks drifted aimlessly and closed flat on Tuesday, ahead of a speech by Federal Reserve Chair Janet Yellen, after trading resumed following a four-day Easter weekend.

The Hang Seng index edged lower in morning trading but ended the session up 0.1 percent at 20,366.30 points. The Hong Kong China Enterprises Index rose 0.3 percent.

Gains in the consumer sector helped offset losses from energy shares, which fell sharply on lower oil prices.

Shares of Chinese beer giant Tsingtao Brewery Co Ltd fell 2.2 percent, after posting a drop in 2015 profits, the first earnings drop since 1999.

Shares of BYD Co Ltd jumped 4.9 percent in Hong Kong, far outperforming the market, after the Chinese automaker backed by Warren Buffett said 2015 net profit rose more than six times over the previous year to a six-year high.

The company said it expects that pace of growth to continue in the first quarter.

Source : Reuters