Dollar and Bond Yields Down, Gold Up, Foreign Stocks Mostly Down, But U.S. Stocks Up – Currency Thoughts
Dollar and Bond Yields Down, Gold Up, Foreign Stocks Mostly Down, But U.S. Stocks Up
April 24, 2025
The DXY weighted dollar index fell 0.5% overnight on slides of 0.7% against the yen, 0.6% versus the euro and Swiss franc, and 0.5% relative to sterling. This day, however, has seen a lower dollar correlated with lower sovereign debt yields as well, including drops of seven basis points in Italy, six bps in France and Spain, four bps in the U.K. and Germany and five basis points in U.S. treasuries.
Stock markets closed down 0.8% in Taiwan, 0.7% in Hong Kong, and 0.4% in India. The German Dax is unchanged, and the British FTSE is 0.3% lower. In contrast, Japan’s Nikkei gained 0.5%, and the Nasdaq and S&P 500 U.S. equity indices currently show gains exceeding 1.0%.
The dollar’s softer tone correlated with a 0.9% upturn in the price of gold but a net 0.9% drop in bitcoin. Oil costs slightly more.
Several U.S. economic indicators have been reported this morning.
- Existing home sales underperformed expectations, falling 5.9% in March to a five-month low
- Durable goods orders leaped 9.2% in March, far exceeding forecasts due to a 139% increase in non-defense aircraft demand. But non-defense capital goods excluding aircraft only rebounded 0.1% from February’s 0.3% decline and were only 1.0% higher in the first quarter than their average a year earlier.
- The Chicago Fed National Activity index sank 0.27 index points to a 2-month low, which was also below analyst expectations, but the Kansas City Fed manufacturing survey index rose by 14 points to a four-month high, also in March.
- New jobless insurance claims last week aligned with expectations and, at 222k, were 6k above the prior week.
According to he latest Federal Reserve Beige Book of regional economic trends published late Wednesday, “just five Districts saw slight growth, three Districts noted activity was relatively unchanged, and the remaining four Districts reported slight to modest declines. The outlook in several Districts worsened considerably as economic uncertainty, particularly surrounding tariffs, rose. Most businesses expected to pass through additional costs to customers. However, there were reports about margin compression amid increased costs, as demand remained tepid in some sectors, especially for consumer-facing firms.”
Today’s menu of price data included a 3-month high in Japanese corporate service price inflation of 3.1% in March; two-month lows in Spanish and Finnish producer price inflation in March of 4.9% and 0.5%; a 4-month low in South African producer price inflation of 0.5%; and a six-month low in Irish wholesale price inflation of -1.9%.
The German IFO Institute’s monthly business climate index improved to a 9-month high of 86.9 in April, but that didn’t deter institute officials from warning that the economy “is preparing for turbulence” amid great uncertainty. Whereas the subindex for current conditions punched in at an 8-month high in April, business expectations fell fact to a 2-month low. The manufacturing and trade sectors dropped to 2- and 3-month lows.
Business confidence in South Korea during April matched March’s 4-month low, and South Korean GDP declined 0.2% last quarter, surprising analysts and pushing the economy’s year-on-year growth rate into the red (-0.1%) for the first time since the last quarter of 2020.
Belgium’s business confidence index has printed below zero since mid-2022 including a 2-month low this month of -14.7. Turkish business confidence also slid back to a two-month low in April, having touched a 10-month high in the previous month.
In the Czech Republic, business sentiment weakened sharply this month to a six month low, and consumer confidence edged up to a 2-month high.
In France where consumer confidence eroded during the final quarter of 2024 from 95 to a 14-month low of 88, such has stabilized with three readings of 92 during the first four months of 2025 including that for April.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Fed Beige Book, French consumer confidence, German IFO Business climate index
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