Prices for U.S. Treasurys rose on Thursday as bailout plans for Cyprus remained in disarray.
Crude oil was pushed lower by fears of further turmoil in the euro zone, as Cyprus scrambled to avoid bankruptcy, and by manufacturing data which showed a deepening downturn in the currency bloc.
Gold rose to a near one-month high, as safe-haven buying emerged after the European Union gave Cyprus an ultimatum to raise billions of euros it needs to clinch a bailout deal or face a likely exit from the currency zone.
European shares closed lower on Thursday amid a selloff spurred by concerns over a banking collapse in Cyprus.
Stock index futures hovered around the flatline Thursday following the weekly jobless claims report, while uncertainty in Cyprus kept investors on edge.
A pick-up in Chinese manufacturing and expectations of monetary easing drove North Asian shares higher but political tensions in Seoul and Sydney put a cap on further regional gains.
Should investors take comfort from the HSBC's flash manufacturing PMI for March that came in above expectations?
Announcing the U.K. budget, Chancellor George Osborne disappointed those who wanted to see a big change in the Bank of England's mandate. The pound strengthened a bit as a result, but I don't think those who are waiting to see it weaken will be disappointed for long.
Housing and jobs data will get a close look from traders Thursday, as they continue to dissect the latest comments from the Fed.
The US dollar rallied after a decision by the Federal Reserve to continue its aggressive monetary easing fueled optimism about the US economic recovery.
Gold slipped slightly in brisk trade on Wednesday after the U.S. Federal Reserve issued its latest policy statement, repeating its accommodative stance while extending it another two years, but gains in the euro provided support for the precious metal.
Stocks finished higher Wednesday, wiping out most of the past week's losses, after the Federal Reserve reaffirmed its policies on bond purchases and record-low interest rates and as investors shrugged off concerns over Cyprus.
Brent crude oil rose above $108 a barrel, recovering from a three-month low, after the U.S. Federal Reserve signaled it would continue its stimulus programs and on optimism that European policymakers can keep a debt crisis in Cyprus from spreading.
U.S. Treasurys fell on Wednesday, with investors weighing the extent of a rally sparked this week by a proposed Cypriot bank tax and the Federal Reserve holding firm on its aggressive stimulus plan.
Markets have embraced the view that Cyprus will strike a deal, most likely with Russia. The euro rallied and stocks gained.
European shares pared their earlier gains to close narrowly mixed Wednesday as investors watched to see if Russia will extend or increase its loan agreement for struggling Cyprus.
U.S. bond investors are seeking new ways to hedge against the risk of a sharp rise in interest rates if the economy picks up and the Fed stops stimulus policies, the FT reports.
Asian stocks were under pressure on Wednesday as concerns rose if a bailout deal was still possible for Cyprus while Greater Chinese shares ignored the news to outperform the market as attention turned to domestic issues.
Chinese stocks are headed for a correction of up to 15 percent in the next two months, one technical analyst says.
With Cyprus creating a new wave of worry, markets will be looking to the Fed Wednesday to keep a steady hand on the tiller.
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