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Friday, 19 March 2010

US equities and the dollar rose while Treasuries fell.

U.S. blue-chip stocks climbed to new 17-month highs Thursday as industrials, including Boeing and 3M, were boosted by improving manufacturing activity, but Bank of America and other financial stocks fell on regulatory concerns. The industrial component sector was boosted by a report of improving manufacturing conditions in the mid-Atlantic area.

Prices of U.S. Treasuries declined amid economic data that pointed to rising growth in a low-inflation environment, as the market pondered over what the Federal Reserve might do with the key emergency borrowing rate. The amount of news received by the market was on the heavy side. It included Treasury plans for upcoming debt issuance. Shorter-dated issues did worse on a relative basis.

The U.S. dollar gained as renewed concerns about Greece's debt problems prompted investors to seek the safety of the greenback and the yen. The euro sank to a one-week low against the dollar and the yen, dipping as low as $1.3586, in a volatile session marked by talk that Greece could seek aid from the International Monetary Fund and speculation that the Federal Reserve could raise the discount rate.

Thursday, 18 March 2010

US equities rose while Treasuries and the dollar were mixed.

U.S. stocks climbed Wednesday for the seventh consecutive day, pushing the Dow Jones Industrial Average to a 17-month closing high as a drop in producer prices calmed inflation worries and boosted sentiment toward economically sensitive stocks including Alcoa, DuPont and Caterpillar.

Prices of shorter-dated U.S. Treasuries were slightly lower, weighed down by rising U.S. stocks and upcoming new government debt supply. On the other end, long-dated Treasuries outperformed, with prices of the 10-year and 30-year maturities posting small gains as a bigger-than-forecast drop in the U.S. producer price index signaled little inflation threat in the economy. Inflation is the main threat to the value of long-dated Treasury securities.

The U.S. dollar declined against higher-yielding currencies, as bets that interest rates will remain extremely low in the U.S. and Japan for a while prompted investors to snap up growth-sensitive assets.

Wednesday, 17 March 2010

 US equities and Treasuries rose while the dollar fell.

U.S. stocks gained for the sixth consecutive day, following the FOMC decision to keep rates low (0 – 0.25%) for an extended period of time. Initially the advance encountered some resistance, but financials emerged to provide the broader market with leadership.

Prices of U.S. Treasuries rose across the yield curve, following the FOMC rate decision to keep rates low.

The U.S. dollar fell against the sterling and euro for most of the trading day as FOMC rate decision was in line with the market consensus.

Tuesday, 16 March 2010

U.S. equities, bonds rose while the dollar was mixed.

U.S. stocks ended slightly higher Monday, despite declines in Caterpillar and Exxon Mobil on concerns over the economy. The Dow Jones Industrial Average gained for five consecutive days, its longest winning streak this year.

Prices of U.S. Treasuries maturing in the next two to five years gained. However trading was slow, ahead of the FOMC meeting. Investors are not expecting any change in the Fed's official rate this meeting, but will be looking out for any change in the language the Fed uses in its meeting statement.

The dollar rose as investors, worried about sovereign-credit risk and rising tensions between China and the U.S. over currency issues, sought safety in the dollar. Bets that the U.S. Federal Reserve could hint at tighter monetary policy at the FOMC meeting added to the dollar's gains against the sterling and euro.

Monday, 15 March 2010

U.S. equities rose while bonds and the dollar was mixed.

U.S. stocks closed mixed Friday as an unexpected increase in retail sales led investors towards more economically sensitive companies such as General Electric and Caterpillar, although financials including Bank of America fell following big gains earlier in the week.

Prices of long-dated U.S Treasuries ended higher as the U.S. late morning weaker-than-expected report on U.S. consumer confidence spurred demand for low-risk government debt. The 30-year bond was the best performer.

The dollar fell, touching a one-month low against the euro, on concerns that U.S. monetary policy may stay loose for a while.

Thursday, 11 March 2010

US equities rose, bonds fell and the dollar was mixed.

U.S. stocks rose slightly Wednesday, with financials and technology stocks leading the major indices to varied gains in the face of choppy trade. Banks were among the best overall performers as regional banks gained 2.9% and diversified banks climbed 1.8%.

Treasuries were down for the session. However strong demand for a $21 billion 10-year note sale helped long-dated Treasury securities recoup most of their early losses, though the whole market remained lower ahead of Thursday's $13 billion 30-year bond auction.

The euro gained against the dollar as a successful sale of a Portuguese government bond allayed some concerns over debt-strapped nations in the euro-zone periphery. Australian dollar, which is closely tied to China's demand for commodities, climbed to a seven-week high against the dollar.

Wednesday, 10 March 2010

U.S. equities and bonds rose while the dollar was mixed.

U.S. stocks rose slightly Tuesday, led by telecommunications companies including AT&T and Verizon Communications following the unveiling of a faster router from Cisco Systems. The Dow Jones Industrial Average rose 0.11% as Cisco unveiled a smarter, faster router following weeks of hype.

Treasuries clung to small gains as ongoing concern over fiscal and debt problems in the euro zone spurred safe haven flows into low-risk U.S. government debt, bolstering demand for a $40 billion sale of three-year notes. The buying was most pronounced in the morning session after credit ratings agency Fitch Ratings said Portugal may be downgraded if its debt consolidation is insufficient.

The dollar continues to trade higher against the euro and the U.K. pound Tuesday but has ceded some of its gains as investors shift back into riskier assets.

Tuesday, 9 March 2010

U.S. equities and bonds fell and the dollar was mixed.

U.S. equities closed slightly lower on Monday, led by health-care stocks as President Obama took health insurers to task in a speech. The stock declines were limited as Cisco is expected to show how it can help telecommunications companies boost their Internet speeds to meet growing demand by users, lifting technology and telecommunication counters.

The mid to long end of the U.S Treasuries fell as the market prepares for the government's latest round of Treasury note and bond auctions this week. The government will be selling $40 billion sale of three-year notes, $21 billion in existing 10-year notes and $13 billion in 30-year bonds.

The U.K. pound fell against the dollar and the euro as investors are worried that the upcoming national election could result in political gridlock, hampering the country's ability to deal with its growing debt levels.

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