· The dollar fell broadly on Friday and was set for its biggest weekly drop in more than three months, dragged lower by weak U.S. economic data, while sterling was slightly below its highest level since June 2018, hit Wednesday after Britain's parliament rejected a "no-deal" exit from the European Union.
U.S. manufacturing output fell for a second straight month in February and factory activity in New York state was weaker than expected this month, offering further evidence of a sharp slowdown in economic growth early in the first quarter.
· Friday's reports extended the streak of weak economic data and underscored the Federal Reserve's "patient" stance toward further interest rate increases this year. Fed officials are scheduled to meet next Tuesday and Wednesday to assess the economy and deliberate on the future course of monetary policy. The U.S. central bank raised rates four times last year.
The dollar index, was 0.21 percent lower, last at 96.58, set for its biggest weekly loss since the first week of December. The move in the dollar sent the euro higher, last up 0.16 percent to $1.132.
While no change in rates is expected next week after the Fed paused a multi-year rate-hiking cycle in January, officials might strike a more cautious view on the outlook for the global economy after a volatile week in currency markets.
· The pound paused for breath but stayed on course for its biggest weekly gain in seven weeks on growing expectations that Britain will not crash out of the EU without a deal on March 29.
Sterling last traded at $1.3283, below Wednesday's nine-month high of $1.3380 but up 2 percent so far this week, the biggest such gain since late January after the UK parliament voted to seek a delay in Britain's exit from the EU, following a decision to avert a no-deal Brexit.
· The yield on the benchmark 10-year Treasury note hit its lowest level since early January on Friday as U.S. government debt rates headed for two straight weeks of declines.
At around 9:50 a.m. ET, the yield on the benchmark 10-year Treasury note had dropped to 2.587 percent, while the yield on the 30-year Treasury bond also slipped, hovering at 3.01 percent. Bond yields move inversely to prices.
Early economic data showed industrial production rose 0.1 percent in February, falling short of economists expansion of 0.3 percent. Meanwhile, job vacancies jumped to a fresh high of 7.6 million in January as employers scramble to fill positions, the Bureau of Labor Statistics reported Friday.
· The U.S. Federal Reserve will remain patient for a little longer than thought just last month, waiting until the third quarter before raising rates once more, and then stay on the sidelines, a Reuters poll of economists showed.
That comes on the heels of a similar Reuters survey which concluded there is a significant risk the European Central Bank goes into the next economic downturn without having raised interest rates at all.
While economists polled unanimously expect the Fed to keep rates unchanged at its March 19-20 meeting, 55 percent of them said it will have hiked at least once by end-September, when the median suggests it will be 25 basis points higher at 2.50-2.75 percent.
· U.S. job openings in January increased in January, led by vacancies at wholesalers, real estate and information sectors, suggesting that a near-stall in hiring in February was probably in part because of a shortage of qualified workers.
Job openings, a measure of labor demand, rose by 102,000 to a seasonally adjusted 7.58 million, the U.S. Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS, on Tuesday. That was not too far from a record high of 7.63 million touched in November.
The job openings rate rose to 4.8 percent from 4.7 percent in December. Hiring rose to 5.80 million from 5.72 million in December. Anecdotal evidence has been growing of companies experiencing difficulties finding workers, a phenomenon that economists expect will slow down job growth this year.
The government reported last week that nonfarm payrolls increased by only 20,000 jobs in February, the weakest since September 2017. Job gains are expected to slow to around 150,000 per month this year as workers become more scarce.
· President Donald Trump’s trade battles cost the U.S. economy $7.8 billion in lost gross domestic product in 2018, a study by a team of economists at leading American universities published this week showed.
Authors of the paper said they analyzed the short-run impact of Trump’s actions and found that imports from targeted countries declined 31.5 percent while targeted U.S. exports fell by 11 percent. They also found that annual consumer and producer losses from higher costs of imports totaled $68.8 billion.
“After accounting for higher tariff revenue and gains to domestic producers from higher prices, the aggregate welfare loss was $7.8 billion,” or 0.04 percent of GDP, the researchers said.
The study was authored by a team of economists at the University of California Berkeley, Columbia University, Yale University and University of California at Los Angeles (UCLA) and published by the National Bureau of Economic research.
· Prime Minister Theresa May’s warned lawmakers that unless they approved her Brexit divorce deal after two crushing defeats, Britain’s exit from the European Union could face a long delay and could involve taking part in European parliament elections.
Britain must take part in European parliamentary elections if its departure from the European Union is pushed back beyond July 1, Austria’s delegate to Brexit negotiations said in an interview published on Saturday.
British Prime Minister Theresa May is expected to head to Brussels next week to request a short delay to the exit process after the UK parliament on Thursday voted in favour of extending negotiations beyond the original March 29 deadline.
Several EU leaders have already said Britain must either have left before a new European Parliament is elected in May to take office in July or must hold its own EU election in order to avoid any legal challenge to the legitimacy of the legislature.
· U.S. fell on Friday as worries about the global economy and robust U.S. production put a brake on prices.
U.S. West Texas Intermediate (WTI) crude oil futures were down 19 cents at $58.42 per barrel, having hit their highest so far this year at $58.95.
Brent crude oil futures were at $67 per barrel, down 23 cents from their last settlement, and below their 2019 peak of $68.14 reached on Thursday.
Reference: CNBC, Reuters
Thai
Eng