From Marc Chandler at Bannockburn Global Forex:
Overview: After stabilizing yesterday, and into today, news of political developments in Germany suggest movement toward an agreement on defense spending and sent the dollar lower. The euro unwound its losses since the election. The US interest rate premium over the eurozone continues to trend lower. Japan disappointed with weak real household spending and Q4 GDP was revised lower. While most G10 currencies are firmer against the dollar, the yen (and Swiss franc) are struggling. Japan's economic data disappointed. The euro's strength has helped lift the central European currencies. The Chinese yuan is up about a third of a 1%, while the Mexican peso is steady/slightly firmer.
The sharp sell-off in US equities has spurred at least 10 corporations to delay their investment grade bond sales. US index futures are firmer today, with the Nasdaq up about 0.6% and the S&P 500 up about 0.3%. Europe's Stoxx 600 is lower for the fourth consecutive session, which if sustained would be the longest losing streak this year. All the large bourses in the Asia Pacific region were off, with Japan, Taiwan, South Korea, and Singapore down more than1%. Only Chinese equities were higher, both on the mainland and in Hong Kong. Japanese and Australian 10-year yields fell six basis points today, while the German political developments have seen European yields climb 2-5 bp today. Gilts are flat, while the US 10-year yield is soft near 4.20%. Gold is recovering and is back near $2910 after testing the $2880 area. April WTI tested last week's low near $65.20 before rebounding and its near session highs (~$66.50) in late European morning turnover.
USD: There has been a sea-change with respect to the dollar....
....MUCH MORE
