From Marc to Market:
Overview: The run on the dollar has been extended today but it has stalled in the European morning. As North American traders return to their posts, the Australian and Canadian dollars, along with sterling are lower on the day. Higher than expected Swedish inflation has helped put the krona on the top of the G10 with more than a 1% gain. It is at its best level against the euro in a couple of years. Most emerging market currencies are lower, led by around a 0.5% loss of the Polish zloty and Hungarian forint.
Today's highlight is the ECB meeting, which is expected to result in another quarter-point cut to 2.50%. The market expects some guidance to suggest a pause near month before another rate cut in June. Meanwhile, the European bond market rout continues, with eurozone benchmark 10-year yields up 6-8 bp. They are up around 45 bp over the past five sessions compared with a four-basis point rise in the US 10-year Treasury yield (now near 4.3%). The EU leaders summit today is expected to confirm the relaxed fiscal stance for defense and security spending. Meanwhile, Asia Pacific equities, with a few exceptions (e.g., Taiwan and Australia) advanced, Europe's Stoxx 600 is off about 0.6% after rallying 0.9% yesterday. US index futures are down sharply, with the Nasdaq off more than 1% and the S&P 500 off 0.80%. Gold is trading softer near $2900. It settled near $2019 yesterday. After plunging to six-month lows yesterday around $65.20, April WTI is firmer today and has held above $66 a barrel.
USD: The Dollar Index snapped a three-day, 1.2% advance on Monday and is falling for the fourth session today....
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