News Worms
News Worms


Dovish Fed boosts emerging assets, stocks at 20-month high

Dovish Fed boosts emerging assets, stocks at 20-month high

Asian stocks crawled higher in early trade on Friday, set for its best week since September, while the dollar continued the slide that began after the Federal Reserve indicated it was unlikely to speed up monetary tightening.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.11% at 100.19, still close to a five-week low of 99.97 hit earlier in the day.

On Wednesday, the loonie rallied the most in a year as the Fed raised interest rates as expected but central bank officials stuck to their outlook for two more rate hikes this year and three in 2018, a more gradual path than some investors had expected.

BOND YIELDS: U.S. Treasury yields recovered some of their losses from the prior day. The yield on the 10-year Treasury note rose to 2.53 percent from 2.50 percent late Wednesday.

The S&P 500 index lost 2.36 points to 2,379.02 and the Nasdaq composite index is down 7.65 points to 5,893.11.

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That helped Amsterdam's AEX stock index climb to its highest level in more than nine years, while both Germany's DAX and France's CAC 40 hit their highest levels since mid-2015 as fears eased that the euro zone was heading inexorably towards a break-up.

US stock indexes took a small step back Thursday, while bond yields recovered some of their sharp losses from Wednesday.

Overnight, Wall Street was subdued following strong gains after the Fed's rate decision.

Europe markets also focused on Dutch elections, where anti-EU firebrand candidate Geert Wilders is providing the latest test of anti-establishment and anti-EU sentiment.

The euro EUR=EBS touched its highest level in 5-1/2-weeks on Friday. Gold rose $27.90, or 2.3%, to $1,228.60 an ounce, silver rose 46 cents to $17.39 an ounce and copper rose 2 cents to $2.67 a pound.

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The sterling to Dollars rate jumped from lows of 1.226 to 1.229 as a outcome. The Bank of England held its interest rates at record lows.

Propelled by dollar weakness and rising commodity prices, emerging currencies also sailed higher.

USA crude CLc1 rose 0.25 percent to $48.87 a barrel after losing 0.2 percent on Thursday.

Yields ticked higher as bond prices fell.

Data released Wednesday showed the Consumer Price Index rose 0.1% in February (http://www.marketwatch.com/story/inflation-posts-smallest-gain-since-last-summer-cpi-shows-2017-03-15), the smallest increase since last summer. The lack of a reaction in markets before and after the election, however, shows that few investors were expecting the far right to gain any significant power in the Netherlands' heavily-fragment parliamentary system.

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