Summary:
The S&P 500 advanced on Thursday and benchmark Treasury yields hit their highest level since early March as robust economic data helped ease recession fears.
The S&P 500 advanced on Thursday and benchmark Treasury yields hit their highest level since early March as robust economic data helped ease recession fears.
The dollar touched a two-week high against a basket of world currencies as upbeat economic data provided cushion to the Fed to continue raising rates.
Gold prices steadied just above the key $1,900 level, its nominal gains hampered by the strengthening dollar.
Oil prices posted modest gains as the solid economic data suggested strong demand and a steeper-than-expected drop in U.S. crude inventories.
Commodities
Investors were concerned about rising interest rates and economic growth after Fed Chair Jerome Powell reiterated that he expects the moderate pace of interest rate decisions to continue in the coming months.
The number of Americans filing new claims for unemployment benefits fell last week by the most in 20 months, offering an upbeat picture of the labor market that could encourage the Fed to keep raising interest rates.
Adding to pressure, annual profits at industrial firms in China, the world's second-biggest oil consumer, extended a double-digit decline in the first five months as softening demand squeezed margins.
Forex
Atlanta Fed President Raphael Bostic said the Fed will have to increase rates if price growth moves away from target, or inflation expectations start to move in ‘a difficult way.’
Market expectations for a 25 basis-point hike by the Fed at its July meeting rose to 86.8% from 81.8% in the prior session, according to CME's FedWatch Tool, and completely rule out a rate cut this year.
The dollar strengthened against the Japanese yen for a third straight day, hitting a fresh 7-1/2 month high of 144.90, as U.S. and Japanese central bank policy plans are expected to remain at opposite ends of the spectrum.
Thursday marked the week's final settlement before Easter, with light trading. Brent and WTI rose about 5%, their first weekly gain in 3 weeks.
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China's first-quarter GDP exceeded expectations, but US tariffs could pose a significant risk, and a reversal in exports is expected.
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