· The dollar rose on Thursday as rival currencies struggled following more dovish soundings from central banks, while the yen gained as investor worries about the global economy grew.
The Reserve Bank of New Zealand joined a growing list of central banks that have turned dovish amid signs of a slowing global economy, saying on Wednesday its next move in interest rates was likely to be a cut.
With many currencies on the defensive, the dollar has brushed aside a decline in benchmark U.S. Treasury yields to 15-month lows.
The dollar index against a basket of six major currencies gained 0.41 percent to 97.18 and headed for its third day of gains.
The euro fell 0.17 percent to $1.123.
The yen rallied 0.03 percent to 110.54 to the dollar as Japanese shares fell, but it was some distance from Monday's six-week high of 109.70.
Sterling fell 0.99 percent towards $1.306 after British Prime Minister Theresa May's offer on Wednesday to quit failed to sway hard-line opponents to back her Brexit withdrawal deal.
· Treasury yields traded slightly higher on Thursday, after the benchmark rate hit its lowest level in more than a year, as trade talks between China and the U.S. resumed.
The yield on the benchmark 10-year Treasury note traded at 2.386 percent while the 2-year note yield climbed to 2.234 percent. Yields move inversely to prices.
Yields followed stocks higher. The major indexes all traded about 0.2 percent higher, led by the materials and consumer discretionary sectors.
Overnight, the 10-year rate hit a fresh 2017 low as investors worried economic growth was stalling. This comes after the yield on the 10-year U.S. Treasury note fell below that of the 3-month bill for the first time since 2007 last week.
· Economic growth in the U.S. slowed in the final part of 2018, with GDP posting a gain of just 2.2 percent in the fourth quarter, the Commerce Department reported Thursday.
The final reading was in line with expectations of economists surveyed by Dow Jones. That was down from the previous estimate of 2.6 percent and leaves full-year growth at 2.9 percent. Third-quarter growth registered 3.4 percent. In all, 2018 was the best year for the economy since 2015 and well above the 2.2 percent increase in 2017. The economy grew 3 percent when compared with the fourth quarter of 2017.
Consumer spending as well as government expenditures at the state and national levels and nonresidential fixed investment all were revised down and subtracted from the GDP. Imports also were revised lower amid continuing tensions between the U.S. and its global trading partners.
Overall, the fourth quarter increase tied for the slowest gain since the first quarter of 2018.
· U.S. Treasury Secretary Steven Mnuchin said on Friday he had a “productive working dinner” the previous night in Beijing, as he headed to a state guest house to begin a day of trade talks.
Mnuchin, speaking to reporters at his hotel, said he was looking forward to his discussions. He did not elaborate.
· China has made proposals in talks with the United States on a range of issues that go further than it has before, including on forced technology transfer, as the two sides work to overcome obstacles to a deal to end their protracted trade war, U.S. officials told Reuters on Wednesday.
Among Trump’s demands are for Beijing to end practices that Washington alleges result in the systematic theft of U.S. intellectual property and the forced transfer of American technology to Chinese companies.
· The U.S. Federal Reserve is done raising interest rates until at least the end of next year, according to economists in a Reuters poll who gave a 40 percent chance of at least one rate cut by end-2020.
While the Fed’s projections show one rate hike next year, the latest Reuters poll of over 100 economists taken after the March 19-20 central bank meeting showed the fed funds rate will stay at the current range of 2.25-2.50 percent until at least end-2020.
· The slowdown seen in the most recent economic data is likely to be short-lived, and there is no need to talk about cutting interest rates, said St. Louis Fed President James Bullard on Thursday.
Bullard, who has been a leader in the Fed’s move to a more dovish stance this year, said he is expecting a “relatively weak first quarter,” but said he wasn’t sure exactly how soft it would be.
· The possible appointment of presidential adviser Stephen Moore to the Federal Reserve would be unlikely to shift the U.S. central bank’s policy because he would be only one voice among many, the head of the St. Louis Federal Reserve Bank, James Bullard, said on Thursday.
“It is a very large committee, 19 at full strength. So no one voice is going to be dominant in that environment,” Bullard said. “There is a huge staff with lots and lots of analysis about where monetary policy should be, so that is informing the judgment as well.”
· “It does look like the pace of increase in the economy has slowed down,” Warren Buffett tells CNBC’s Becky Quick. “I’d call it somewhere close to noticeably, but I wouldn’t go beyond that.”
Buffett notes that a slowdown in BNSF, the railroad company owned by Berkshire, is flashing a signal of slower growth, but he adds that some of the data may be distorted by seasonal factors, such as the weather.
His comments come as fears of an economic slowdown have driven Treasury yields down sharply.
· Oil prices settled roughly flat on Thursday, recovering from the day's worst losses that came shortly after U.S. President Donald Trump called for OPEC to boost crude production to lower prices.
"Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!" Trump tweeted.
Futures hit a session low immediately following Trump's comments, but then rallied above pre-tweet levels.
U.S. West Texas Intermediate crude futures settled 11 cents lower at $59.30 a barrel. Earlier the contract fell to $58.20 a barrel.
International Brent crude oil futures fell 1 cent to $67.82 a barrel on Thursday, after earlier sinking to $66.54 a barrel in the wake of Trump's tweet.
Reference: CNBC, Market Watch, Reuters
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