The dollar declined versus most major peers

Good Morning,

- The dollar declined versus most major peers as the S&P fell to a three-week low. The U.S. dollar index was last down at 80.20 level.

- US stocks suffered another heavy drop yesterday. Nasdaq 3-day loss worst since 2011. Japan's Nikkei -1.36%, Hong Kong's Hang Seng 0.98% (07:15 GMT), Korea's Kospi 0.17%, Australia's ASX 200 -0.13% and China's Shanghai 1.92%.

- The euro rose against most of its major counterparts as ECB policy makers signaled deflation risks are contained, subduing speculation of a round of bond-buying to boost prices and economic growth. The shared currency snapped a three-day slump versus the U.S. dollar as ECB board member Yves Mersch said deflation risks aren’t imminent and Governing Council member Ewald Nowotny signaled there is no immediate need for action.

- The Swiss unemployment rate fell to a non-seasonally adjusted 3.3 percent in March from 3.5 percent in the previous month. Adjusted for seasonal factors, the unemployment rate stood at 3.2 percent, unchanged.

- The Bank of Japan refrained from adding extra stimulus as policy makers said the world’s third-biggest economy could maintain a recovery even with last week’s increase in the sales tax. Governor Haruhiko Kuroda maintained a pledge to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen per year, the central bank said today in Tokyo, as forecast by all economists in a Bloomberg survey.

- BOJ’s Kuroda says recovery continuing even with sales tax hike. Positive cycle works in economy driven by robust domestic demand. Consumption likely to fall from April in reaction to pent-up demand ahead of sales tax hike. Japan likely to see consumer inflation reach 2% target around end of fiscal 2014 through early fiscal 2015. BOJ to watch risks and adjust policy as needed. Tankan shows companies expect prices to steadily rise. Japan GDP to slump in Q2 due to sales tax hike but rebound in summer onwards due to improvements in job and income conditions.

- National Australia Bank: Business conditions lifted slightly in March, but remained at relatively subdued levels, weighing on business optimism. Confidence still positive but softened to its lowest post-election level to be below long-run trend. Sales fell slightly in March and employment, though better, still points to soft labour market conditions. Most industries saw some improvement in conditions, especially mining, but transport and “bellwether” wholesale weakened significantly. Near-term outlook still soft according to forward indicators. Inflation outlook well contained due to limited upstream pressures, and retail prices fell. Economic growth forecasts unchanged with unemployment still expected to rise to 6½% by late 2014 and one more rate cut probable in late 2014.

- New Zealand business confidence held steady in the first quarter and remains at its highest level since mid-1994. A seasonally adjusted net 52% of firms expect business conditions to improve over the next six months.

- Russia’s ruble depreciated to 41.63 versus the central bank’s basket of dollars and euros, after advancing for the past three weeks. The nation’s bonds and stocks also weakened. Protesters calling for a boycott of May 25 presidential elections in Ukraine occupied government buildings in Donetsk, Kharkiv and Luhansk over the weekend.

- Watch today: UK output, US NFIB Index, US chain store sales.

Have a nice Day !