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Crude extends longest winning streak of 2017, investors search for safe havens, and the yen breaks through a key level versus the U.S. dollar. Here are some of the things people in markets are talking about today.
Crude Can’t Lose
West Texas Intermediate oil prices posted their seventh straight advance on Tuesday, lengthening their longest such stretch of the year. Crude got as high as $53.43 per barrel after reports that Saudi Arabia is likely to support an extension of the deal to curb output and lowered its production in March to under 10 million barrels per day. U.S. consumers, however, shouldn’t fear sticker shock at the pump—the Energy Information Administration estimates that prices will average $2.42 per gallon through the summer, just four cents above current levels.
A search for safety dominated U.S. markets Tuesday, with Treasury yields falling and bullion soaring above its 200-day moving average to hit a five-month high. So did the CBOE Volatility Index (better known as the VIX), but the measure of implied equity volatility’s advance was short-lived. The S&P 500 index declined marginally, ending the day down 0.14 percent.
Yen Breaks 110
Risk aversion buoyed the yen, which strengthened against the U.S. dollar to levels not seen since November. Japan’s currency was tops in the G10 on Tuesday, which bodes ill for domestic equities. As such, Nikkei 225 futures are in the red as of 6:40 a.m. Tokyo time, while S&P/ASX 200 futures edge higher.
U.S. President Donald Trump apparently offered a carrot to his Chinese counterpart Xi Jinping, tweeting on Tuesday that he told Xi if China solves “the North Korea problem,” they'’ll get a better trade deal with the U.S. Meanwhile, Stephen Schwarzman—chairman of Blackstone Group and a top outside adviser to Trump—said China probably won’t be labeled a currency manipulator by the Treasury Department. These developments come amid a period of relatively smooth sailing for the Chinese currency in spot, forward, and options markets.
There’s a full docket of data due out for the Asia Pacific region, with South Korea’s March unemployment rate—expected to dip two tenths of a percentage point to 3.8 percent—kicking things off at 8:00 a.m. Tokyo time. At 8:50 a.m., Japanese machinery orders are forecast to rise 3.6 percent month-on-month, rebounding smartly from January’s 3.2 percent decline. Producer prices in Japan are projected to increase by 1.4 percent annually for March, reinforcing sentiment that departing Bank of Japan Governor Haruhiko Kuroda’s job to vanquish deflation wasn’t fully accomplished. Also slated for release: Chinese producer and consumer price inflation for March, expected to rise 7.5 and 1 percent year-on-year, respectively, and April’s reading of Australia’s Westpac Consumer Confidence index.
What we’ve been reading
This is what caught our eye over the last 24 hours.
Why the day after mattered for United as the passenger ejection video went global.
Toshiba says the one phrase you never want to say: “going concern.”
Uber competitor Lyft was valued at $7.5 billion.
Eros International sees Bollywood streaming boom.
For British consumers, Brexit bites.
Trump settles lawsuit against famous chef.
New law in Zimbabwe makes banks accept cowllateral.