Market News

Italian bonds were set for their worst week since July on Friday as talk of a March election renews focus on the political risks facing the euro zone’s third biggest economy, while broader debt markets drew support from wrangling over a U.S. tax bill.

The Greenback continued to bleed pips as a hurdle in the GOP’s tax reform concerned market players. Meanwhile, Kiwi jumped higher on a reassurance from NZ’s FinMin.

Euro zone government bond yields are close to multi-month lows just as the European Central Bank is on the verge of cutting its bond-buying scheme by half, leaving some investors worried that a sharp correction may be due in 2018.

Asian shares erased earlier modest gains on Friday but were still on track for a weekly rise, as sentiment was hurt by Wall Street’s weakness on concerns about the progress of U.S. tax reform.

The dollar had a mixed performance for the session even with upbeat retail sales, and it was the euro that found clear direction during the ECB presser.

Here are some key quotes from a news conference by Bank of Canada Governor Stephen Poloz following a year-end speech in which he said the central bank is growing increasingly confident that the economy will need less stimulus over time.

U.S. retail sales increased more than expected in November as the holiday shopping season got off to a brisk start, pointing to sustained strength in the economy that could pave the way for further Federal Reserve interest rate hikes next year.

The U.S. dollar gained against the euro on Thursday after the European Central Bank raised growth and inflation forecasts for the euro area, but stuck with its pledge to provide stimulus for as long as needed.

The European Central Bank raised growth and inflation forecasts for the euro area on Thursday but stuck to its pledge to provide stimulus for as long as needed, predicting inflation would remain below target into 2020.

The SNB, BOE, and ECB announced their monetary policy decisions during the session, but price action was disappointingly underwhelming since EUR was range-bound, GBP had two-way action. CHF had clear directional movement at least.

China’s central bank on Thursday nudged up money market rates as authorities sought to defuse financial risks without imperiling the economy, a balancing act that they have managed successfully so far this year as activity remained broadly steady.

Oil markets rose on Thursday, lifted by a fourth straight weekly fall in U.S. crude inventories, though climbing output capped prices well below the 2015 highs reached earlier this week.

The Aussie was king of pips in today’s forex trading session, as traders cheered strong job numbers from Australia.

Japan’s ruling bloc approved a plan on Thursday to slash the corporate tax rate to around 20 percent from 30 percent – but only for companies that raise wages aggressively and boost domestic capital spending.

Dollar bears painted the town red while bulls booked profits even after the FOMC announced a 0.25% rate hike as head honcho Yellen stayed cautious on inflation.

The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, as anticipated, but left its rate outlook for the coming years unchanged even as policymakers projected a short-term acceleration in U.S. economic growth.

The U.S. dollar weakened on Wednesday after consumer price data showed sluggish inflation, adding to concerns the Federal Reserve will be less able to execute multiple rate increases next year.

Underlying U.S. consumer inflation slowed in November amid weak healthcare costs and the biggest drop in apparel prices since 1998.

Prime Minister Theresa May warned rebellious lawmakers in her own party they could endanger Britain’s smooth exit from the European Union if they tried to change her Brexit blueprint later on Wednesday.

Trading conditions were relatively tight as forex traders braced themselves for the FOMC statement. GBP was an exception, though, since it jumped higher ahead of the U.K.’s jobs report, but encountered sellers later.