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The US Senate voted overwhelmingly on Thursday to give Jerome Powell a second term as US Federal Reserve chair.

In US economic data, the Producer Price Index (PPI) lifted by 0.5% in April to be up by 11% on the year (survey: +10.7%). The core PPI (ex-food and energy) rose by 0.4% in April to be 8.8% higher on a
year ago (survey: +8.9%). Initial jobless claims rose by 1,000 to 203,000 in the past week (survey: 193,000).

European sharemarkets fell on Thursday. The pan-European STOXX 600 index slid by 0.8% with basic resources stocks down 2.9%. The German Dax index lost 0.6% and the UK FTSE index shed 1.6%. The UK economy shrank by 0.1% in March but expanded by 0.8% for the first quarter of 2022 (survey: +1%). In London trade, shares in Rio Tinto and BHP both fell by 2.9%.

US sharemarkets were volatile on Thursday. After plunging almost 2% earlier in the session, the S&P 500 index almost erased its losses into the close of trade after Federal Reserve Bank of San Francisco
President Mary Daly said that a 75 basis point rate hike is “not a primary consideration.” Walt Disney shares dipped 0.9% following a disappointing quarterly report. Shares of Apple (-2.7%), Boeing (- 4.8%) and Microsoft (-2%) all fell. The Dow Jones index closed down by 104 points or 0.3%, its sixth-straight daily decline. The S&P 500 index fell by 0.1%, but the Nasdaq index added 7 points or 0.1%.

US treasuries rose on Thursday (yields lower) as investors sought safe haven assets. The US Treasury sold US$22 billion of 30-year notes at a yield of 2.997% into solid demand. US 10-year yields fell by around 6 points to near 2.86%. And US 2-year yields also dipped by around 5 points to near 2.58%.

Major currencies were mostly weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0513 to lows near US$1.0354 and was near US$1.0375 at the US close. The Aussie dollar fell from highs near US69.01 cents to lows near US68.28 cents and was near US68.55 cents at the US close. But the Japanese yen firmed from 129.64 yen per US dollar to JPY127.51 and was near JPY128.30 at the US close.

Global oil prices were mixed on Thursday. Crude was tugged in opposing directions by a lack of progress in European efforts to embargo Russian crude and data showing that fuel inventories are dropping to critical levels. The Brent crude price fell by US6 cents or 0.1% to US$107.45 a barrel. But the US Nymex crude price added US42 cents or 0.4% to US$106.13 a barrel.

Base metal prices were mostly lower on Thursday on mounting worries about weak global demand. Tin fell by the most, down 5.6%, followed by zinc (-3.9%) and copper (-2.7%). Nickel was flat.

The gold futures price fell by US$29.10 or 1.6% to US$1,824.60 an ounce. Spot gold was trading near US$1,823 an ounce at the US close. The iron ore futures price slid US$4.04 or 3% to US$130.16 a tonne after property developer Sunac China Holdings defaulted on a dollar bond as China’s debt crisis spread.

Ahead: In Australia, Reserve Bank Deputy Governor Michele Bullock participates on a panel. In the US, import/export prices and consumer confidence data are scheduled

Originally published by CommSec