ECONOMY
On Thursday , Asia Indices held near eight-month highs and the dollar slipped again on expectations global interest rates will stay lower for longer after a dovish turn by the European Central Bank and milder than expected U.S. inflation. The British pound was little changed after European leaders agreed to extend the deadline for UK to leave the union to the end of October, averting a potential crash out of the bloc on Friday with no divorce deal.
Investors’ risk appetite was generally capped by U.S. threats earlier this week to slap tariffs on goods from the European Union.
On Wednesday, the European Central Bank (ECB) kept its loose policy stance and warned that threats to global economic growth remained. The ECB has already pushed back its first post-crisis interest rate hike, and President Mario Draghi raised the prospect of more support for the struggling euro zone economy if its slowdown persisted.
U.S. consumer prices increased by the most in 14 months in March but underlying inflation remained benign against a backdrop of slowing global economic growth.
Minutes from a March 19-20 meeting of Federal Reserve policymakers showed they agreed to be patient about any changes to its interest rate policy as they saw the U.S. economy weathering a global slowdown without a recession in the next few years.
U.S. Treasury Secretary Steven Mnuchin said on Wednesday the United States and China have largely agreed on a mechanism to ensure that both sides stick to the deal, including establishing new “enforcement offices.”
CURRENCY
U.S. Treasury yields slipped in response, reinforcing expectations that the Fed would hold rates steady or possibly cut them by the end of the year.
The dollar index fell for a fourth straight day to 96.909.
The euro was barely changed at $1.1275 after ECB outcomes.
The Japanese yen paused after three days of gains at 111.03.
Sterling traded at $1.3100, unchanged on the day and staying in a triangle holding pattern between $1.2945 and $1.3380 during the past month or so.
COMMODITY
Brent futures eased 14 cents to $71.59 a barrel. U.S. crude dipped 24 cents to $64.37.
Gold hovered near a two-week top on Thursday at $1,307.795 an ounce as investors fretted about the global economy and trade tensions.
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