• The dollar hit a 2018 peak against a basket of currencies on Monday as investors increased bets that rising interest rates and inflation in the United States would boost the greenback, while traders unwound their bearish positions on the currency.
The index that tracks the dollar against a basket of currencies climbed to 92.974, its highest since December. It was last up 0.2 percent at 92.792.
• Traders have scaled back expectations on the timing of when the European Central Bank may raise interest rates following a spate of disappointing regional economic readings.
The euro broke below $1.19 for the first time this year in the aftermath of weaker-than-expected data on German industrial orders and euro zone investor sentiment.
The euro shed 0.3 percent at $1.1924 after touching $1.1896, the lowest in more than four months.
• FOMC COMMENTS
As benchmark oil prices touched $70 a barrel, Federal Reserve officials on Monday said that rising U.S. inflation and wage pressures are not enough yet to prompt a change in the central bank’s rate outlook.
Speaking on the sidelines of an automation conference here, Atlanta Federal Reserve Bank President Raphael Bostic and Dallas Federal Reserve Bank President Robert Kaplan both said they would tolerate inflation a bit over the Fed’s two percent target, and were sticking with an outlook for two more interest rate increases this year.
- Atlanta Federal Reserve bank president Raphael Bostic said on Monday he is comfortable with “some overshoot” of inflation and that the Fed will not draw a “big signal” on the likely path of prices if wages, as expected, begin to rise faster.
- U.S. interest rates have room to rise further given the remarkable strength of the U.S. economy, the Federal Reserve’s newest regional Fed president said on Monday in his first major speech on monetary policy since he was appointed.
“Monetary policy is still pretty accommodative...when unemployment is low and inflation is effectively at our target, we probably ought to go to neutral in that environment,” Richmond Fed president Thomas Barkin told an audience at George Mason University in Fairfax, Virginia. He is a voting member of the Fed’s rate-setting committee this year after having joined the Richmond Fed in January.
• China’s top economic official will visit Washington next week to resume trade talks with the Trump administration, the White House said on Monday, after discussions in Beijing last week failed to produce agreement on a long list of U.S. trade demands.
Defense Secretary Jim Mattis urged top lawmakers shepherding a must-pass defense bill through Congress to include measures that would tighten oversight of foreign investment in the United States in hopes of hampering Chinese efforts to gain access to sensitive U.S. technology.
• U.S. President Donald Trump will request a package of $15 billion in spending cuts from Congress on Tuesday, including some $7 billion from the Children’s Health Insurance Program championed by Democrats, senior administration officials said on Monday.
The proposed cut to the CHIP program drew a rebuke from U.S. Senate Democratic leader Chuck Schumer.
“It appears that sabotaging our health care system to the detriment of middle-class families wasn’t enough for President Trump and Republicans; now they’re going after health care dollars that millions of children rely on, especially during outbreaks of the flu and other deadly illnesses,” he said in a statement after an initial report about the CHIP proposal.
The senior administration official, speaking to reporters on a conference call, said the cuts would not hurt the program. Of the total amount, $5 billion came from an account from which the money is not authorized to be spent under the law, he said.
• The United States on Monday announced sanctions on three Venezuelans and 20 companies with ties to socialist President Nicolas Maduro for narcotics trafficking, with U.S. Vice President Mike Pence calling for more nations to increase pressure on Caracas.
• China’s main ports will step up quarantine checks on imports of apples and logs from the United States, and shipments found carrying disease or rot could be returned or destroyed, the Chinese customs agency said on Monday.
U.S. President Donald Trump has threatened to impose tariffs on up to $150 billion in Chinese goods over allegations of intellectual property theft.
Fruits were among 128 U.S. goods that China slapped with more expensive import tariffs early last month in retaliation for U.S. levies on Chinese steel and aluminum.
• German Chancellor Angela Merkel said on Monday her conservative bloc wanted a reduction in European banking sector risks before a banking union can be formed, adding that the euro zone’s rescue fund should remain under parliamentary control.
• The Iranian oil industry will continue to develop even if the United States pulls out of the 2015 nuclear deal, and Tehran would see the accord as operational as long as it can sell oil, the Oil Ministry’s news service quoted senior officials as saying on Monday.
U.S. President Donald Trump has threatened to pull out of the Iran deal by not extending sanctions waivers when they expire on May 12 unless European signatories of the accord fix what he calls its “flaws”.
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