Headlines – International
U.S President Donald Trump said yesterday he’s still ready to pull out of the North American Free Trade Agreement if he can’t renegotiate better terms for the U.S. but that he decided to hold off on a decision after appeals from the leaders of Canada and Mexico.He also said a quick U.S. withdrawal “would be a pretty big shock to the system.”
ECB left rates unchanged as growth risk diminish and President Mario Draghi signaled no urgency to tighten monetary policies despite an improved economic picture. The euro fell versus the dollar and most of its G-10 peers.Draghi said that even amid the progress in growth, “underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend,” bringing focus to the ECB’s single mandate of price stability. The euro, which surged at the start of the week after the French election Sunday, dropped versus all but two of its major peers.
U.K. retail sales grew at their fastest annual pace in 19 months in April, according to the Confederation of British Industry.The CBI’s monthly retail index climbed to 38, the highest since September 2015, from 9 in March. Clothing and groceries led the gain, with hardware retailers reporting “solid growth,” despite the late timing of the Easter holiday which usually proves a boost for the high street. Even so, retailers are wary as consumers start to feel pinch from faster inflation.
Inflation in Europe’s largest economy strengthened more than economists forecast in April, rebounding after an Easter-holiday related dip the previous month.Consumer-price growth in Germany accelerated to 2 percent from 1.5 percent the previous month, the Federal Statistical Office said on Thursday. The reading compared with the median forecast of economists for a reading of 1.9 percent.Draghi has so far argued that stronger inflation is mainly driven by volatile components like oil and food, while underlying price pressures remain subdued.
The Bank of Japan kept its stimulus policies unchanged while lowering its inflation forecast, underscoring that any exit from its unprecedented monetary easing remains far away.The central bank will continue to use its two policy rates and asset purchases to spur prices higher, it said in a statement Thursday.The BOJ made a small increase to its growth forecasts for this fiscal year and next.
Oil slid to a one-month low as Libya reopened its biggest field and increases in U.S. product inventories and crude output weighed on the market.Futures dropped 1.3 percent in New York. Crude from the Sharara field in Libya has starte flowing to the Zawiya refinery and a force majeure on its western port of Zawiya has been lifted. Both U.S. gasoline and distillate stockpiles rose by the most since January last week.West Texas Intermediate for June delivery dropped 65 cents to settle at $48.97 a barrel on the New York Mercantile Exchange, the lowest level since March 28. Brent for June settlement, which expires Friday, slipped 38 cents to end the session at $51.44 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $2.47 premium to WTI.
Market in details
The Bloomberg Dollar Spot Index added less than 0.1 percent, after increasing 0.3 percent on Wednesday.
EUR/USD saw choppy trading during the ECB press conference, rising to 1.0933 from its interim low as Draghi’s more upbeat tone appeared to align with trader expectations that had built over the course of the week. It traded lower by 0.3 percent to $1.0874.
GBP/USD is at 1.2897,overnight gains 0.5% to hit 1.2917, highest since Oct. 3.
AUD/USD is at 0.7670, overnight up 0.1% to 0.7484 off a 0.7455 low
USD/CAD pared gains in Europe’s session as oil prices declined, with Nafta fears pushed back after Trump indicated he wouldn’t terminate the trade agreement at this time.
Treasuries advanced, with the yield curve steepening, as a risk-off sentiment took hold across markets after posturing by lawmakers in Washington.
The 10-year Treasury yield slipped to 2.29 percent. The rate fell three basis points to 2.30 percent on Wednesday, after climbing for five straight sessions.
German benchmark yields slid five basis points to 0.296 percent after the ECB’s signal that inflation remains tepid.
Swedish government bonds rallied after the central bank unexpectedly extended its bond-buying program, prompting investors to bet that policy makers will delay a rate increase.
U.S. stocks ended higher amid a whirlwind of policy news and earnings, with equity benchmarks trading at or near record levels.S&P 500 up 0.1% to 2,389 at 4pm.Dow Industrials up less than 0.1% to 20,982.Nasdaq up 0.4% to record 6,049.Consumer discretionary (+0.6%), health (+0.3%), real estate (+0.1%) biggest gainers.Telecom (-1.3%), financials (-0.5%), consumer staples (-0.2%) biggest laggards.
European stocks pared their decline after European Central Bank President Mario Draghi said the euro-area economy’s recovery is “solid and broad,” while warning that inflation wasn’t strong enough to consider tapering its stimulus program.Stoxx 600 down 0.2% at the close.Dax down 0.2% at 12,443.79.FTSE 100 down 0.7% at 7,237.17.Stoxx Banks SX7P down 0.9% at 183.57.S&P 500 down 0.1% at 2,385.2.
WTI slips to lowest level in a month as Libya reopens largest oil field. U.S. product stockpile increases last week as shown in EIA report are also weighing on oil markets.
Gold futures advanced 0.1 percent to $1,265.50 an ounce in New York. Contracts remain below the pre-election level of $1,305.06 an ounce. Prices cratered more than 13 percent through Dec. 22. They ground back to $1,289.76 this month after Trump’s airstrikes on Syria and Afghanistan.
Iron ore’s sell-off may be set to worsen. The world’s largest mining company says that global supplies are poised to increase in the coming years as low-cost producers add more tons to the market, delivering its warning just hours after a similar red flag from the World Bank.