• The U.S. dollar rose to one-week highs against the euro on Thursday after the European Commission said Italy’s 2019 budget draft is in serious breach of EU budget rules.
The U.S. dollar index, which tracks the greenback against a basket of currencies, was at 95.965 in the morning following an overnight rally from above the95.6 mark.
The step prepares the ground for what would be an unprecedented rejection of a member state’s fiscal plan.
The euro tumbled to $1.1455, its lowest against the greenback since Oct. 9, on the news.
The single currency and the British pound also dropped as summit talks in Brussels failed to resolve a Brexit standoff between London and the EU over the status of the Irish border, an issue playing an increasingly dominant role in negotiations.
Sterling was last trading at $1.302, down 0.71 percent on the day.
• Italy’s planned budget plan does not pose a “Greek-like” threat to European Union financial stability but Brussels was looking at what could be the “next steps”, the bloc’s financial services chief said on Thursday.
Asked if Italy was facing a crisis like Greece did during the euro zone debt crisis, Dombrovskis said: “I would not jump on that kind of speculation”.
• Italy’s Prime Minister defended its free-spending budget on Thursday, brushing off criticism from Brussels as the European Commission stepped up pressure over a draft it labeled an unprecedented breach of EU fiscal rules.
Giuseppe Conte also faced discontent over the 2019 fiscal plan at home, calling a meeting of the government for Saturday to stave off an emerging internal rift over conditions of a partial tax amnesty.
• A report on risks to the stability of derivatives markets posed by Brexit could lead to regulatory intervention, European Commission officials said on Thursday, dismissing warnings they could tumble off a cliff edge if Britain leaves the bloc with no deal.
• New applications for U.S. unemployment benefits dropped last week and the number of Americans on jobless rolls fell back to levels last seen in 1973, suggesting a further tightening in labor market condition.
That, together with a robust economy likely keep the Federal Reserve on course to increase interest rates again in December.
Initial claims for state unemployment benefits decreased 5,000 to a seasonally adjusted 210,000 for the week ended Oct. 13, the Labor Department said. Claims fell to 202,000 during the week ended Sept. 15, which was the lowest level since November 1969.
• The Federal Reserve should continue with its gradual rate hikes but must be prepared to slow the tightening if U.S. productivity breaks out of a several-year lull, as it may be poised to do, an influential Fed governor said on Thursday.
• The Federal Reserve will push the United States economy into recession if it follows on its current interest rate path, according to Rabobank.
President Donald Trump said on Thursday he presumes missing Saudi journalist Jamal Khashoggi is dead and that the U.S. response to Saudi Arabia will likely be “very severe” but that he still wanted to get to the bottom of what exactly happened.
• If Democrats win control of the U.S. House of Representatives or Senate next month, nearly every aspect of Donald Trump’s presidency could face swift examination – from his long-elusive tax returns to possible business ties with Russia and conflicts of interest, congressional sources say.
• China has filed a request with the World Trade Organisation to establish an expert group to determine the legality of tariffs imposed by the United States on imports of steel and aluminum, the Ministry of Commerce said late on Thursday.
• Japan’s core consumer prices rose 1.0 percent in September from a year earlier, government data showed, a sign a moderate economic expansion continues to underpin inflation - but not yet enough to push it near the central bank’s 2 percent target.
• Global benchmark Brent crude has fallen almost $8 per barrel since reaching a four-year high of $86.74 on Oct. 3, weakened by lower forecasts for global economic growth as the United States and China impose tariffs on billions of dollars of each others’ goods.
Brent crude settled at $79.29 per barrel, down 76 cents. U.S. crude was down $1.10, or 1.6 percent, at $68.65.
Reference: Reuters, CNBC
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