· The U.S. dollar inched higher against a basket of currencies on Tuesday as benchmark U.S. 10-year Treasury debt yields rebounded from 15-month lows due to stock gains on Wall Street as investors brushed aside disappointing domestic data on housing starts and consumer confidence.
An index that tracks the greenback against a basket of major currencies was 0.22 percent higher at 96.78. It touched 96.745 earlier on Tuesday, near a 1-1/2-week peak.
Ten-year Treasury note yields were 2.414 percent in late U.S. trading, holding above a 15-month low of 2.3770 percent set on Monday. The premium on three-month T-bill rates was a little more than 4 basis points, about half a basis point more than Monday, Refinitiv data showed.
The dollar held steady despite a government report that showed U.S. developers broke ground for single-family homes at the slowest pace in over 1-1/2 years in February. The Conference Board said its gauge of American consumers' mood dipped to 124.1 in March, falling short of a 132.0 forecast.
The euro slipped on Tuesday, reversing some of Monday's gains tied to a stronger-than-forecast German business confidence survey.
The euro was down 0.34 percent at $1.1272.
· Long-term U.S. government debt yields snapped their recent streak of declines Tuesday following a steep fall over the past week.
At around 11:01 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 2.434 percent, while the yield on the 30-year Treasury bond was also higher at 2.878 percent.
Those fears continue to keep parts of the Treasury yield curve inverted, with the yield on the 3-month bill above that of the 10-year note.The short-term rate first exceed that of several longer-term securities last week in a phenomenon known as inversion and viewed by many as a recession predictor.
· Federal Reserve Bank of Boston president Eric Rosengren sees a rate hike as the U.S. central bank’s possible next move, according to an interview with Bloomberg published on Tuesday.
Rosengren described himself as “more optimistic” over the economic outlook than his colleagues on the policy-setting Federal Open Market Committee. Rosengren has a vote on that committee this year.
If he turns out to be right about his economic forecast, he told Bloomberg, “it is possible the next move would be up” but if conditions deteriorate it is also possible that the next move could be a rate cut.
· Federal Reserve policymakers need to be vigilant that muted inflation does not become ingrained in their expectations, but the U.S. central bank’s patient approach to monetary policy should allow inflation to reassert itself, San Francisco Federal Reserve Bank President Mary Daly said on Tuesday.
· San Francisco Federal Reserve Bank President Mary Daly on Tuesday said she supports the Fed’s current policy of waiting to adjust its short-term interest-rate policy until the economic data makes it clear whether what is needed is a rate hike or a rate cut.
“Patience is where I’m at right now,” Daly told reporters after a speech at the Commonwealth Club in San Francisco. “That’s where I am going to stay until the data suggests we go one way or another way.”
· British Prime Minister Theresa May will address her Conservative lawmakers on Wednesday, possibly to set out a timetable for her departure in a last throw of the dice to win support for her twice-rejected Brexit deal in parliament.
Parliament’s move seemed to have focused minds, with some eurosceptic lawmakers saying they could back her plan before choosing a new leader for the next phase of talks with the EU. But as yet her Northern Irish powerbrokers remained opposed.
· President Donald Trump’s choice of former campaign adviser Stephen Moore to serve on the Federal Reserve Board is stirring misgivings among some bankers, who worry that the conservative economist would erode the Fed’s political independence.
Moore hasn’t been formally nominated or even fully vetted by the White House yet, but Trump’s enthusiastic announcement that he would tap the Heritage Foundation economist for the central bank caught both Washington and New York off guard.
· China’s economy showed “unmistakable” signs of recovery in the first quarter, with company profits, investment and hiring improving, but policymakers may be relying too much on extraordinary levels of credit, a private survey showed on Wednesday.
The quarterly survey of thousands of Chinese firms by China Beige Book International (CBB) painted a surprising picture of a turnaround in business conditions after a poor fourth quarter that saw the weakest economic growth since the financial crisis.
· Oil rose sharply on Tuesday as OPEC supply cuts and expectations of lower U.S. inventories outweighed concern about weaker demand due to an economic slowdown.
The price of global benchmark Brent crude has risen about 25 percent in 2019, supported by supply curbs by the Organization of the Petroleum Exporting Countries plus allies, and involuntary losses due to U.S. sanctions on Iran and Venezuela.
Brent was up 70 cents at $67.89 a barrel, not far from its 2019 high of $68.69 reached on March 21. U.S. crude added $1, or 1.9 percent to settle at $59.94. WTI traded above $60 earlier in the day.
Reference: CNBC
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