The dollar tumbled and safe havens like the yen and gold rallied as investors braced for the economic damage that Hurricane Irma may inflict on Florida, while the euro stayed stronger after the European Central Bank stopped short of attempting to jawbone it lower.
Futures contracts pointed to a positive open for Asian equity markets. The S&P 500 Index, Nasdaq Composite Index and Dow Jones Industrial Average barely budged on Thursday. The euro strengthened to the highest in almost three years after ECB President Mario Draghi cautioned on the common currency’s strength though didn’t expand on any action to address it. The yen hit its strongest since November. Ten-year Treasury yields fell toward 2 percent.
Draghi said he’s watching the euro’s gains as policy makers edge toward settling the future of their bond-buying program. The euro’s surge — more than 14 percent against the dollar this year — was reflected in a downgrade to the ECB’s inflation outlook, though Draghi said economic growth remains solid.
Meanwhile, the threat from North Korea lingers. U.S. President Donald Trump said it’s not “inevitable” that the U.S. will wind up in a war with North Korea over its continued development of nuclear weapons, though military action remains an option. Pyongyang may
test a missile this weekend to coincide with its “founding day” on Sept. 9.
Terminal subscribers can read more on our Markets Live blog.
The key events this week:
- Japan is expected to revise downward second-quarter economic growth to an annualized 2.9 percent from 4 percent.
- Australia’s home-loan approvals probably increased 1 percent in July from June.
- China’s trade surplus is forecast to widen to $48.5 billion in August from July’s $46.7 billion.
- China’s forex reserves climbed $11 billion to $3.09 trillion in August, a seventh gain in a row as the yuan rose, the PBOC said Thursday
- Also due in Asia are Taiwan exports.
- Malaysia’s central bank held its main rate at 3 percent Thursday as expected.
- U.S. jobless claims surged last week by the most since November 2012 because of benefit claims from Hurricane Harvey. They increased to 298,000 versus an estimate of 245,000.
- The White House is considering at least six candidates to succeed Janet Yellen as the next Fed chair, people familiar with the matter said.
And here are the main moves in markets:
- Futures on the Nikkei 225 Stock Average rose 0.1 percent as of 7:11 a.m. in Tokyo, while they also rose on South Korea’s Kospi index and Australia’s main gauge.
- Hang Seng Index futures were up 0.4 percent.
- Contracts on the S&P 500 Index were little changed after the underlying benchmark ended little changed on Thursday.
- The Japanese yen held on to gains at 108.39 per dollar after increasing 0.7 percent.
- The euro was steady at $1.2020 after jumping to its strongest since 2015.
- The Australian dollar was little changed at 80.47 U.S. cents following a 0.6 percent increase.
- The Bloomberg Dollar Spot Index lost 0.7 percent Thursday, hitting the lowest in more than two years with its sixth straight decline.
- The yield on 10-year Treasuries fell more than six basis points Thursday to 2.04 percent.
- Gold was little changed at $1,349.06 an ounce, and touched its highest in a year. It advanced 1.1 percent on Thursday.
- West Texas Intermediate crude was steady at $49.10 a barrel.
- Copper sank 0.1 percent to $3.15 a pound, the first retreat in more than a week.
— With assistance by Andrew Dunn