The softer US dollar provided some support to global equities and commodities markets today, spreading a more optimistic tone and increasing risk appetite. The USD index reversed recent solid gains and retreated towards 99.20 after having hit 100.00 in early trading this morning. The US equity markets rebounded with the Dow Jones index surging over 200 points (+1.15%) towards 17,850, while the S&P 500 and NASDAQ also reported strong gains in today’s session.
European equities were fairly mixed, as the CAC and DAX indices remained under pressure amid persistent concerns about Greece’s economic stability, while the London benchmark index rebounded over 0.70% towards 6,800. The euro recovered and climbed higher above 1.06 against the USD, showing signs of a small correction higher.
On the macroeconomic front, US retail sales dropped sharply 0.6% in February missing analysts’ expectations of a 0.3% rise, while business inventories remained unchanged instead of a 0.1% increase initially expected. Weekly jobless claims rose 289,000 for the week ending 7th March versus analysts’ estimates of 305,000. The main focus will turn to the release of the US Federal Reserve monthly budget statement in the afternoon.
In the UK, the Royal Institute of Chartered Surveyors (RICS) reported at its month residential survey that London has been the only region in the UK where more surveyors reported house prices declines in February instead of increases. According to the RICS survey, house prices increased across the rest of country due to supply issues as fewer houses and flats are coming onto the marketplace. Sterling remained under pressure today breaking below 1.49 against the US dollar but held around 1.41 against the euro.