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MORNING BID AMERICAS-Dollar surges after central bank barrage, Apple bruised
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MORNING BID AMERICAS-Dollar surges after central bank barrage, Apple bruised
Mar 22, 2024 3:30 AM

A look at the day ahead in U.S. and global markets from Mike

Dolan

The U.S. dollar seems to have emerged a clear winner from the

week's magical mystery tour of world central banks - with record

high Wall St and world stocks getting a shot across the bow from

Apple's ( AAPL ) antitrust bust.

A whistle stop look at the week's multiple central bank

readouts shows a surprise rate cut in Switzerland, cuts in

Mexico and Brazil and an unusually dovish Bank of England tilt

that brings a June UK rate cut into view. And there were

promises of more monetary easing to come in China to add to the

mix.

Although the Bank of Japan finally set about 'normalising'

in the other direction, and Taiwan's central bank delivered a

surprise hike too, the overall thrust is a global central bank

cycle that has turned before the Federal Reserve kicks off.

While the Fed held the line on Wednesday, as expected, and

continued to flag three rate cuts later this year, the slightly

hawkish takeaway was that its policymaker projections removed

one cut from next year's 'dot plot'.

And so with other central banks jumping the Fed gun on the

first move and potentially cutting deeper over the coming two

years, the dollar has got a shot in the arm.

The dollar index hit its highest in over a month on Friday

and has now climbed more than 2% from March troughs.

Eye-catching overnight was a swoon in China's offshore yuan

to its weakest level of the year, without any ostensible

trigger beyond the dovish soundings from deputy governor of the

People's Bank of China. China's stocks closed sharply

lower too.

But the dollar was pumped up across the board, hitting 2024

highs against the Swiss franc, Japan's yen and

one-month peaks against sterling.

Reflecting a firmer Fed horizon beyond this year, U.S.

Treasuries stalled - with two-year yields firming up

above 4.60%.

Perhaps strange in an election year, Treasury market

volatility measures subsided to their lowest since

before the Fed began its tightening campaign two years ago.

The latest U.S. economic readouts continued to show brisk

business growth and labor market tightness and markets will now

switch attention next Friday's release of the Fed's favored PCE

inflation gauge.

Buoyant Wall St stocks clocked record closing highs again on

Thursday, but Apple's ( AAPL ) 4% slide dampened the mood as

U.S. antitrust regulators moved in - sending a warning to a

market so heavily concentrated in Big Tech megacaps.

Although its stock stabilised overnight, the U.S. Department

of Justice and 15 states sued Apple ( AAPL ) in a government crackdown on

Big Tech - alleging the iPhone maker monopolized the smartphone

market, hurt smaller rivals and drove up prices.

Apple ( AAPL ) joins competitors sued by regulators, including

Alphabet's Google, Meta Platforms ( META ) and

Amazon.com ( AMZN ) across the administrations of both former

president Donald Trump and President Joe Biden.

Elsewhere, overnight earnings were mixed.

FedEx ( FDX ) shares surged 13% after the bell after the

company narrowed its fiscal 2024 profit forecast and announced

share buybacks that help offset less business from its largest

customer, the U.S. Postal Service.

But Nike ( NKE ) stock skidded 6% after it warned its

revenue in the first half of fiscal 2025 would shrink by a low

single-digit percentage as the world's largest sportswear maker

scales back on franchises to save costs.

Key diary items that may provide direction to U.S. markets later

on Friday:

* Federal Reserve Chair Jerome Powell, Fed Vice Chair Philip

Jefferson, Fed Board Governor Michelle Bowman, Fed Vice Chair

for Supervision Michael Barr and Atlanta Fed President Raphael

Bostic all speak

* European Central Bank President Christine Lagarde attends Euro

Summit in Brussels, ECB chief economist Philip Lane speaks

* Canada Jan retail sales and government budget balance

(By Mike Dolan, editing by Christina Fincher,

[email protected])

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