The U.S. dollar was mostly firmer vs. the majors on a Turnaround Tuesday, reversing the selling trend that was in place since last week as Greece concerns came back into the markets (see below). EUR/USD rally ran out of gas around 1.3540 and then fell back to test 1.34 and end with an outside down day. Yen was mostly softer, however, and so USD/yen rose to test the 93 area, its highest level since early January. Biggest gainers on the day vs. USD were CLP, GBP, KRW, ZAR and COP, while biggest losers vs. USD were HUF, CZK, RON, EUR and NOK. EM currencies were mostly softer, though USD/BRL managed to remain below 1.80. U.S. data had little impact, as CaseShiller home price index was close to expectations and consumer confidence was only slightly better than expected. RUB rebounded the day after the Moscow subway bombings, helped by higher oil and commodity prices. U.S. equity markets were mixed, with the Dow Jones, S&P 500 and Nasdaq up 0.1%, flat%, and up 0.3%, respectively. European markets were lower, as DJ Euro Stoxx 50 ended down 0.3%. Asian equities are likely to open up today as Asian ADRs were higher during N. American trading Tuesday. Nikkei futures point to a flat open for Japan, but the softer yen should help Japan exporters. U.S. bond market was mixed, as 2- and 10-year yields rose 2 bps and were flat, respectively. European bonds were mixed too, as 10-year yields in U.K., France and Germany were up 2 bps, down 2 bps, and down 2 bps, respectively. Greek 10-year yields rose 16 bps after an unexpected 12-year bond sale went poorly, as only EUR 390 mln sold vs. EUR 1 bln planned limit. Greece announced plans to sell 3-, 6-, and 12-month bills in Apr. Meanwhile, 10-year Portugal yields were flat, Italy down 2 bps, and Spain down 1 bp.
The Greek fiscal problems have morphed into a larger structural issue for Europe. Germany itself has come under criticism by some euro-zone members including France, over its export reliance, its sluggish domestic economy and its stingy wage policy.