Yields on benchmark ten-year U.S. Treasury yields US10YT=RR jumped nearly 12 basis points on Wednesday, climbing to 3.23 percent, its highest levels since mid-2011 after private payrolls data was stronger than forecasts. [US/]
The combination of strong data and hawkish comments sent the dollar index =USD up 0.2 percent to 96.1, its highest since Aug. 20 and nearing a 2018 high of 96.99 hit in mid-August.
The widening selloff in emerging market currencies rippled into the core G10 FX space with the euro coming under pressure despite Italian budget concerns fading into the background.
The single currency EUR=EBS was trading flat at $1.1481 after hitting a six-week low in Asian trading at $1.1463.
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The Washington-based lender said in a report on Thursday that the region’s developing economies should use the “full range” of available macroeconomic policies to cushion the impact of external shocks.
Growth in developing East Asia and the Pacific (EAP), which includes China, was on track to slow to 6.3 percent this year from 6.6 percent last year, the World Bank said in its Economic Update report, with 2019 growth expected at 6.0 percent.
The 2019 forecast is slower than the World Bank’s 6.1 percent estimate in April, reflecting a slowdown in China as it continues to rebalance its economy away from investment and towards domestic consumption.
China’s growth is projected to slow to 6.5 percent this year, the World Bank said, unchanged from its earlier estimate, but growth next year is expected to slow to 6.2 percent, compared to a previous projection of 6.3 percent.
· Japanese carmaker Nissan said on Thursday a no-deal Brexit will have “serious implications” for British industry and urged Britain and the European Union to reach a deal on their future trading relationship.
· India’s central bank is expected to raise rates for a third time since June on Friday to combat inflationary pressures as it grapples with a weakening rupee, surging oil prices and market instability sparked by a major non-bank finance firm’s defaults.
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· Oil prices on Thursday slipped from four-year highs reached the previous session, pressured by rising U.S. inventories and after sources said Russia and Saudi Arabia struck a private deal in September to raise crude output.
Brent crude oil futures LCOc1 were trading at $86.14 per barrel at 0651 GMT, down 15 cents, or 0.2 percent, from their last close.
Brent on Wednesday hit a four-year high of $86.74 a barrel, lifted by expectations of a tightening market ahead of U.S. sanctions that will target Iran’s oil exports from next month.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 18 cents, or 0.2 percent, at $76.23 a barrel.
Reference: Reuters, CNBC, DailyFX
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