• Federal Reserve policymakers were increasingly split on the outlook for inflation and how it might affect the future pace of interest rate rises, according to the minutes of the Fed's last policy meeting on June 13-14 released on Wednesday.
The details of the meeting, at which the U.S. central bank voted to raise interest rates, also showed that several officials wanted to announce a start to the process of reducing the Fed's large portfolio of Treasury bonds and mortgage-backed securities by the end of August but others wanted to wait until later in the year.
"Most participants viewed the recent softness in these price data as largely reflecting idiosyncratic factors...however, several participants expressed concern that progress...might have slowed and that the recent softness in inflation might persist," the Fed said in the minutes.
• U.S. Treasury yields edged lower but were near multi-week or multi-month peaks after the minutes. Benchmark 10-year Treasury notes last rose 5/32 in price to yield 2.3285 percent, from 2.346 percent.
• The dollar was barely up against a basket of currencies but pared gains after the Fed minutes as traders focused on the rift among U.S. policymakers over the pace of future rate increases with signs of inflation softening. It was last up 0.06 percent.
The dollar steadied against its peers early on Thursday after the Federal Reserve's policy meeting minutes took the wind out of its advance, with the market awaiting comments by central bankers and U.S. data for its next cues.
The dollar index against a basket of major currencies was flat at 96.296 .DXY.
• The yen rose briefly on safe-haven demand after North Korea said it conducted a test of a newly developed intercontinental ballistic missile (ICBM) that can carry a large nuclear warhead. It strengthened 0.05 percent versus the greenback at 113.21 per dollar.
• The euro inched down 0.1 percent to $1.1339 EUR= following its decline to a one-week trough of $1.1313 on Wednesday.
• Factory orders dropped by a more-than-expected 0.8% in May. The report was another data point in a handful of releases that show a slowing U.S. economy even as the Fed looks ahead to the continuing removal of accommodative policy. Nonfarm-payrolls data are due out Friday.
• U.S. data on tap later in the day include the ADP employment report, ISM non-manufacturing PMI and the initial jobless claims.
• Investors will also look to comments from San Francisco Fed President John Williams and Fed Board Governor Jerome Powell for their potential impact on U.S. yields.
• A meeting between Mexican President Enrique Pena Nieto and U.S. President Donald Trump on Friday at the G20 summit in Germany will last about 30 minutes and probably not lead to any major agreements, Mexico's foreign minister said on Wednesday.
• Britain said on Wednesday it was sending in a task force to help run the local authority struggling to cope with the aftermath of a London tower block blaze which killed at least 80 people.
Kensington and Chelsea council has been criticized by victims' relatives and survivors for its handling of the disaster in Grenfell Tower on June 14 and its leader quit last week over the response to the fire.
• Oil prices fell sharply on Wednesday after their longest rally in more than five years while stocks ended higher after minutes from the U.S. Federal Reserve's last meeting showed contrasting opinions.
Oil prices tumbled about 4 percent on Wednesday, ending their longest string of daily gains in more than five years, as climbing OPEC exports and a stronger dollar spurred selling.
Brent crude futures settled down $1.82, or 3.7 percent, at $47.79 a barrel. Prices had climbed for eight straight sessions to Monday. U.S. West Texas Intermediate crude fell $1.94, or 4.12 percent, to settle at $45.13 a barrel.
Tumbling oil prices put pressure on the energy sector, which limited gains for Wall Street's S&P 500 benchmark.
Reference: Reuters, Market Watch
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