• The euro rose to a nearly two-week high while the 10-year U.S. Treasury yield hit a 1-1/2-week peak on Wednesday after officials said the European Central Bank could wind down its stimulus program by the end of the year.
Robust growth is making the central bank increasingly confident that inflation is on its way back to target, ECB chief economist Peter Praet said on Wednesday, raising the likelihood it may use a meeting next week to reveal more about the end of its bond-buying program.
Praet’s comments pushed the euro to $1.1796, the highest level since May 22. It was last up 0.5 percent at $1.1775. The dollar index fell 0.27 percent.
• Treasury yields rose Wednesday alongside their eurozone peers after remarks from a senior European Central Bank official showed the central bank remained on track to debate next week the timetable for ending its asset purchases.
The 10-year Treasury note yield TMUBMUSD10Y, +0.38% rose 5.9 basis points to 2.975%, its highest since May 24. The two-year note yield TMUBMUSD02Y, +0.00%was up by 2.8 basis points to 2.520%, and the 30-year bond yield TMUBMUSD30Y, +0.30% climbed 5.7 basis points to 3.130%.
Bond prices move in the opposite direction of yields.
• The U.S. dollar’s dominance is forecast to fade soon, with any sudden change in expectations for the policies of other central banks posing the biggest risk, a Reuters poll of currency strategists showed.
But expectations the Federal Reserve will raise rates next week and again later this year are already built into the dollar outlook. Predictions for the monetary policy of other central banks now matter more.
The euro rallied to a 10-day high against the dollar on Wednesday after European Central Bank Chief Economist Peter Praet said there would be a debate at the June14 policy meeting, a day after the Fed is expected to raise rates, on ending the bank’s bond-buying program by the end of 2018.
The ECB is expected to stop buying tens of billions of euros a month of bonds by December, according to a separate poll of economists.
• U.S. President Donald Trump is not backing down from the tough line he has taken on trade, the White House’s top economic adviser said on Wednesday, setting the stage for a showdown with top allies at this week’s G7 summit in Canada.
• The European Union expects to hit U.S. imports with additional duties from July, ratcheting up a transatlantic trade conflict after Washington imposed its own tariffs on incoming EU steel and aluminum.
• Mexican tariffs are roiling U.S. congressional campaigns in states where U.S. exporters could take a hit and President Donald Trump’s Republicans face tough races in November congressional elections.
• There is little Congress can do to stop President Donald Trump if he wants to relax penalties on ZTE Corp (000063.SZ), despite strong bipartisan opposition to easing restrictions on China’s No. 2 telecommunications equipment maker.
• The United States is aware of reports that Iran plans to increase its uranium enrichment capacity and Washington will not allow Iran to develop a nuclear weapon, U.S. Secretary of State Mike Pompeo said on Wednesday.
• Oil prices fell on Wednesday on worries that global supply is climbing after U.S. inventories rose unexpectedly and Saudi Arabia and other big producers signaled that they may increase output.
U.S. light crude CLc1 settled down 79 cents, or 1.2 percent, at $64.73 a barrel. Brent pared losses late in the session, settling down 2 cents at $75.26 a barrel. In post-settlement trade, Brent turned positive, rising 18 cents a barrel.
• U.S. crude inventories rose 2.1 million barrels in the week to June 1, the Energy Information Administration said, a surprise after analysts had forecast a decrease of 1.8 million barrels. Fuel inventories also rose.
Reference: Reuters, Market Watch
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