Metals closed essentially flat yesterday, as a substantially weaker dollar offset a moderate technical correction.
We’re seeing a little consolidation this morning ahead of Fed Chair Janet Yellen’s testimony before the Joint Economic Committee of Congress at 10am.
The dollar is still near a six-month low, while the euro is hanging on near a seven-week high. The yen has strengthened past the psychologically important 102 level.
Ukraine isn’t the only area of unrest today, as China has its finger in several pots. After a third terrorist attack by Uyrghur separatists based in the Muslim-majority province of Xinjang, Chinese premier Xi Jinping declared an aggressive anti-terrorism campaign. Xinjang, which borders Pakistan, India, and Mongolia, is a major petroleum producing region in China’s far northwest.
Chinese vessels in the South China Sea repeatedly rammed two Vietnamese Navy patrol craft and used water cannons against their crews, as a Chinese oil rig was placed in disputed waters near the Paracel Islands. Also in the disputed area, Philippine patrol vessels arrested a Chinese fishing boat that had harvested over 350 endangered sea turtles, against international law.
Thailand is another hotspot back in the news, as the Constitutional Court removed Thai Prime Minister Yingluck Shinawatra for violations of the constitution and abuse of power. This triggered street protests among her supports, in the latest event of national unrest that has paralyzed the country since November.
Wall St. opened in the green, but the Nasdaq promptly nose-dived, in part due to the plunging share price of Twitter. Euro stocks opened soft, but gained in afternoon trading. Asian stocks were down on weakness in the tech sector, and a strong yen.
Tomorrow is the meeting of the European Central Bank, but improving economic data is expected to allow them to delay outright “money printing” again this month. Watch for plenty of talk about the euro contributing to disinflation, in an attempt to stem its recent rise.