Dollar at 20-Year High, Yen 20-Year Low
STOCK INDEX FUTURES
U.S. stock futures declined, and government bond yields increased to fresh multi-year highs as investors remain worried about additional interest rate increases from the Federal Reserve.
The 9:00 central time March wholesale inventories report is expected to show an increase of 2.3%.
The dominant influences remain geopolitical tensions and the hawkish Federal Reserve.
The U.S. dollar index advanced to a new 20-year high as expectations of further Federal Reserve monetary tightening to combat inflation and fears of slowing global economic growth drove investors into the safety of the U.S. dollar.
Interest rate differential expectations suggest higher prices are likely for the greenback.
The Swiss franc fell to its lowest level in 29 months after the latest Swiss unemployment numbers were above expectations at 2.3%. This underscores the belief that Swiss National Bank will remain dovish. While the Federal Reserve indicated that it will continue to tighten monetary conditions to curb inflation, the SNB said it does not plan to deviate from its ultra-easy monetary policy any time soon, as Chairman Jordan stated current levels of inflation are temporary.
The Japanese yen fell to a new 20-year low.
Interest rate differential expectations remain bearish for the Japanese yen and lower prices are likely.
The Canadian dollar is lower on news that Canada’s building permits declined 9.3% In March from February.
INTEREST RATE MARKET FUTURES
Futures are mixed, trading higher at the front end of the curve and lower at the long end of the curve.
In recent days futures have not responded well to bullish news, especially the 30-year Treasury bond futures.
Lower prices are likely across the board for the interest rate market futures as most major central banks are anticipated to tighten credit policies this year.
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