In Asia stocks were flat on Thursday morning as increased expectations of a Federal Reserve rate hike in June. The Nikkei ended the morning session flat at 16,636.67. Exporters’ shares rose on the yen’s relative weakness. Home appliance and electronics exporter Panasonic Corp. (T:6752) and tyre exporter Bridgestone Corp. (T:5108) each gained 0.5%.
The USD/JPY was higher on Thursday after the minutes of the U.S. Federal Reserve’s latest policy meeting rekindled expectations for a June interest rate hike. The dollar rose to 110.27 yen at one point. The USD/JPY is trading around 110.05 yen, down 0.1 percent on the day. The euro traded at $1.1216.
Oil prices fell on Thursday, pulled down by rising U.S. crude inventories, a stronger dollar and surging output from Iran to Europe and Asia. Brent crude futures were down 1.8%, trading at $48.06 per barrel. U.S. crude futures were down 1.5%, at $47.45 a barrel. The bull-run ended after the U.S. Energy Information Administration (EIA) published data showing an unexpected 1.31 million barrel rise in U.S. crude stocks to 541.29 million barrels.
In the US the S&P 500 closed little changed, with a rally in banks offsetting broader declines paced by consumer shares, as Federal Reserve policy makers signalled a willingness to raise borrowing costs in June if the economy continues to improve. AT&T Inc (NYSE:T). dropped 1.7%. Freeport-McMoran Copper & Gold Inc (NYSE:FCX) fell 8.4%. Hormel Foods Corp (NYSE:HRL). tumbled 8.6%.
Treasuries fell after minutes of the Federal Reserve’s April meeting showed policy makers considered an interest-rate increase in June appropriate if the economy continued to improve. Yields rose across maturities as the market-implied probability of a rate hike next month jumped to 32%. Yields on the benchmark 10-Year note climbed eight basis points, to 1.85%. Two-year note yields rose six basis points to 0.89%.
Economic Calendar
- 09:00 GMT+1 UK Retail Sales
- 13:30 GMT+1 US Initial Jobless Claims
- 13:30 GMT+1 US Philadelphia Fed Business Outlook
- 14:30 GMT+1 US Fed’s Dudley Speaks on Macroeconomic Trends in New York
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