• The dollar hit a four-month high on Wednesday, boosted by the benchmark U.S. Treasury yield, which continued its rise after breaking through 3 percent on Tuesday for the first time in four years.
The dollar’s performance against a basket of major currencies rose as high as 91.241 in New York trade, its strongest level since Jan. 12.
• The 10-year U.S. Treasury yield rose 5.2 basis points to 3.035 percent on Wednesday, driven by worries about the growing supply of government debt and inflationary pressures from rising oil prices.
The 10-year Treasury yield hit 3% on Tuesday for the first time in more than four years, reflecting expectations that the Fed will hike its key rate four times in 2018.The CME Group FedWatch page showed roughly 53% odds of a fourth quarter-point rate hike coming in December, up from one-in-four odds after the deceptively strong March jobs report two weeks ago.
The CME Group’s FedWatch tool recently pointed to a 98.4% probability that interest rate target will move in June from the current rate of 1.5%-1.75% to 1.75%-2%.
• The dollar's gains on Wednesday drove the euro EUR= down past the two-month low hit on Tuesday because of concerns that firmer U.S. yields would reduce demand for the region's bonds at a time when hedge funds have amassed record long euro bets.
• Analysts say the market needs clarity about the European Central Bank’s pace of planned rate hikes before the euro can break higher.
• The European Central Bank is set to keep policy unchanged on Thursday, playing down worries over recent softness in the euro zone economy and leaving the door open to ending its lavish bond purchase scheme by the close of the year.
• The historic meeting between South Korean President Moon Jae-in and North Korean leader Kim Jong-un will include an official dinner at the joint security area of Panmunjom, an official from Seoul's presidential office Cheong Wa Dae said Monday.
At a working-level meeting held at Panmunjom earlier Monday, the two Koreas also agreed that the summit will begin before noon Friday, Cheong Wa Dae spokesman Kwun Hyuk-ki told a press briefing.
"The South and the North have held three rounds of working-level talks on protocol, security measures and media coverage of the April 27 summit at Panmunjom. Today, they reached a final agreement," said Kwun, who is also a member of South Korea's five-member delegation to the working-level dialogue.
• South Korea’s economy rallied last quarter, buoyed by healthy exports and a boost from government spending, while private consumption growth remained sluggish.
Gross domestic product for the January-March period rose 1.1 percent, the Bank of Korea said on Thursday, rebounding after contracting by 0.2 percent in the fourth quarter.
• The United States will press NATO allies, especially Germany, to increase military spending while underscoring the heightened threat from Russia, a senior State Department official said on Wednesday before Friday’s meeting of the alliance in Brussels.
Asked whether U.S. Secretary of State nominee, Mike Pompeo, would attend the meeting if he was confirmed by the U.S. Senate on Thursday, the official said, “We are following this closely, but don’t have anything to announce on that right now.”
• Oil prices rose on Wednesday despite data showing rising U.S. inventories, holding within sight of three-year highs reached the previous day on geopolitical tensions including the prospect of fresh sanctions on Iran.
French President Emmanuel Macron forcefully challenged many of the U.S. president’s policies during a visit to Washington, saying an international nuclear deal with Iran, which President Donald Trump has harshly criticized, was not perfect but must remain in place until a replacement is forged. Trump will decide by May 12whether to restore U.S. sanctions on Tehran, which could be a first step to ending the deal.
Brent crude LCOc1 settled 14 cents higher at $74.00 a barrel, below the November 2014 intraday high of $75.47 reached on Tuesday. U.S. crude futures CLc1 ended up 35 cents at $68.05 a barrel.
Reference: Reuters, Koreaherald, Investors, Metalbulletin
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