The US dollar retreated overnight, albeit not with a lot of conviction. The major Asian equity indexes closed higher (except Japan’s Nikkei 225), following the lead from record closing highs for the S&P 500 and Nasdaq. European equity indexes are firmer, but Wall Street futures are flat (as of 5:30 am ET). The higher than forecast US CPI (2.6% y/y vs forecast of 2.5%) helped knock 10-year US Treasury yields down to 1.638% today from 1.6620 yesterday.
Traders continue to ignore geopolitical tensions. Iran said it planned to enrich uranium closer to weapons-grade. China is annoyed at President Biden’s decision to send an “unofficial delegation” to Taiwan. The Russian Assistant President summoned the American ambassador as the Russian military masses along the Ukraine border.
AUDUSD rallied to 0.7694 from 0.7636 after Westpac Consumer Confidence data jumped to 6.2% from 2.6%. The rally snapped the downtrend line from February, setting the stage for further gains.
NZDUSD rallied despite the RBNZ repeating that it would lower the OCR rate if required. The central bank met expectations and left monetary policy unchanged. NZDUSD climbed to 0.7119 from 0.7049.
