• The dollar was little changed on Thursday against a basket of currencies in choppy trading, fading from a two-week high as investors reduced bets against the greenback on renewed turbulence in the stock and bond markets.
The index that tracks the dollar versus six currencies was marginally higher at 90.292. It has gained 1.2 percent since last Friday, putting it on track for its largest weekly gain since late October.
• This belief ties in with a Reuters poll of strategists who said the dollar’s rebound was unlikely to be sustainable.
• The euro was down 0.1 percent at $1.2248, after earlier falling to a two-week low. The single currency has declined 2.6 percent since hitting a three-year high of around $1.2536 just 10 days ago.
• U.S. government debt yields rebounded to near four-year highs Thursday as central bank moves and strong jobs data both goaded interest rates higher.
The surge in rates, however, was quickly followed by another major sell-off in equities, sending yields from their highs as investors fled for safe havens like Treasurys.
The 10-year yield nearly surpassed a 4-year high of 2.885 percent Thursday morning New York time, a level that helped trigger a global sell-off in equity markets on Monday. The 30-year bond yield hit a high of 3.168 percent, its highest level since March 15, when the 30-year yielded as high as 3.177percent.
• The number of Americans filing for unemployment benefits unexpectedly fell last week, dropping to its lowest level in nearly 45 years as the labor market tightened further, bolstering expectations of faster wage growth this year.
Initial claims for state unemployment benefits decreased 9,000 to a seasonally adjusted 221,000 for the week ended Feb. 3, the Labor Department said on Thursday. Claims fell to 216,000 in mid-January, which was the lowest level since January 1973.
• The U.S. Senate failed to muster enough votes to advance a stand-alone military funding bill, paving the way for lawmakers to move on to a broader spending measure to keep the federal government open after funding runs out later on Thursday.
U.S. senators are poised to take up a separate budget deal that increases defence and non-defence spending over two years, with a vote expected later in the day.
• President Donald Trump is focused on the long-term fundamentals of the economy, which he believes are very strong, White House spokesman Raj Shah said on Thursday in response to the steep drop in the U.S. stock market.
• Serious challenges remain to be solved at talks to modernize the NAFTA trade accord, in particular over hardline U.S. demands for major reforms, Canadian Foreign Minister Chrystia Freeland said on Thursday.
• The Bank of England said it is likely to raise interest rates earlier and faster than previously expected to damp the effects of a stronger global economy on UK inflation.
The pound jumped more than 1 per cent against the dollar and the euro, while the FTSE 100 index dropped 1.6 per cent, as the bank turned hawkish in its quarterly inflation report.
All nine members of the bank’s Monetary Policy Committee agreed a statement that the central bank was no longer willing to tolerate inflation above its2 per cent target over the next three years.
• Japanese Economy Minister Toshimitsu Motegi said economic fundamentals remained strong both in Japan and the United States, in response to questions about a plunge in U.S. stocks on Thursday.
• Oil prices fell to their lowest in seven weeks on Thursday amid fears of rising global supplies after Iran announced plans to increase production and U.S. crude output hit record highs.
Brent futures LCOc1 fell 70 cents, or 1.1 percent, to settle at $64.81 a barrel, their lowest close since Dec. 20. U.S. West Texas Intermediate (WTI) crude CLc1, meanwhile, was down 64 cents, or 1 percent, to settle at $61.15, its lowest close since Jan. 2.
Reference: Reuters, CNBC, Financial Times
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