The dollar rose with Treasury yields as central-bank officials in Europe and the U.S. signaled divergent paths for monetary policy. American equities trimmed a sixth straight quarterly gain.
The greenback pared its biggest quarterly loss in a year after two Fed speakers suggested rates may need to rise faster than the market currently anticipates, while the euro weakened and core European government bonds rose as investors weighed the prospect of the ECB sticking with its loose monetary policy as inflation slows. The S&P 500 Index was little changed. Oil rose toward $50 a barrel. The South African rand bounced.
While European central bank officials doused expectations policy makers were planning to withdraw monetary support, Fed officials shifted to a more hawkish tone, as the worldâ€™s biggest economy progresses toward goals for full employment and 2 percent inflation. Investors remained focused on Washington, where Republicans hinted they may revisit health-care reform, raising concern that tax cut attempts may take a back seat.
â€śThe ECB is likely to tread very carefully in the coming months, and not adjust their forward guidance or tone significantly before they feel more comfortable about the economy and inflationary pressure,â€ť Bas van Geffen, an analyst at Rabobank International, wrote in a note.
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Here are key events the rest of this week:
Other Fed officials are scheduled to make appearances, including Bank of Cleveland President Loretta Mester and Bank of Dallas President Robert Kaplan.
Here are the major moves in the markets:
The S&P 500 was little changed at 2,361 at 9:31 a.m. in New York. The benchmark gauge is down 0.1 percent in March and up 5.5 percent in the quarter.
The Stoxx Europe 600 Index rose 0.2 percent after closing Wednesday at the highest since December 2015.
The MSCI Emerging Market Index slipped 0.3 percent.
The euro fell 0.4 percent to $1.0725, after declining 0.9 percent over the previous two days. The British pound rose 0.2 percent to $1.2456.
The Bloomberg Dollar Spot Index rose 0.2 percent and the rand strengthened 1.3 percent.
German bonds gained, with the yield on 10-year bonds dropping by around one basis point after inflation in Europeâ€™s largest economy decelerated more than forecast in March.
Yields on 10-year Treasuries climbed one basis point. The rate fell four basis points on Wednesday after rising the same amount in the previous session.
West Texas Intermediate crude rose 0.6 percent to $49.78 a barrel after a report that OPEC is in talks to include all members in extending output cuts.
Gold slipped 0.5 percent to $1,247.26 an ounce.
Japanâ€™s Topix fell 0.9 percent, while the Shanghai Composite dropped 1 percent, retreating for a fourth straight day.
Australiaâ€™s S&P/ASX 200 index climbed for a third day to the highest since April 2015 as energy shares jumped.