* Trump says he wants low interest rates
* Dollar "getting too strong"
* China surprises with punchy trade data
By Jamie McGeever
LONDON, April 13 U.S. Treasury yields tumbled on
Thursday and were on track for the biggest weekly decline since
late 2015 after U.S. President Donald Trump said he would like
to see interest rates stay low, while inflows into bonds drained
life from stocks.
The dollar slumped after Trump's remark that it was "getting
too strong" and would hurt the U.S. economy, but it later clawed
back those declines to snap a three-day losing streak, its
longest since January.
The fall in 10-year Treasury yields narrowed the premium
over shorter-dated yields. This flattening of the yield curve
hurt bank stocks, which were among the biggest fallers on
U.S. futures pointed to a fall of around 0.3 percent at the
open on Wall Street as investors digested Trump's
apparent reversals on interest rates, Federal Reserve Chair
Janet Yellen and China's currency policy.
"Trump now seems to appreciate the Fed's dovish monetary
policy stance given additional hikes will serve to boost the
dollar," Rabobank strategists wrote in a note on Thursday.
"Trump is most certainly not the first politician to make
many promises on the campaign trail only to be forced into an
about-face on these promises once in office. Rhetoric and
reality are two very different things,"
The benchmark 10-year U.S. Treasury yield slid to a
five-month low of 2.22 percent. It is down 15 basis
points this week, marking the sharpest weekly drop since October
Trump's remarks came in an interview with The Wall Street
Journal published late on Wednesday. He also said China was not
manipulating its currency - doing so would hurt talks with
Beijing on dealing with North Korea - and that he would not rule
out re-nominating Yellen once her four-year term is up next
Most financial markets will be closed on Friday for the Good
Friday holiday, meaning trading volumes on Thursday have been
much lighter than usual.
The pan-European index of leading 300 stocks fell 0.5
percent to 1,496 points, Germany's DAX was
down 0.3 percent and Britain's FTSE 100 was down 0.6
European bank stocks were down more than 1 percent
as the flatter yield curve hurt banks' profitability. A
17 percent rise in profit from JP Morgan, the biggest
U.S. bank by assets, failed to give a meaningful boost to
financials or equities more broadly.
Asia MSCI's broadest index of Asia-Pacific shares outside
Japan rose a third of one percent, while the
yen's earlier strength helped push Japan's Nikkei down
Surprisingly strong Chinese trade figures and
Trump's remarks that the United States will not name China a
currency manipulator helped boost Asian stocks.
The dollar index, which tracks the greenback against
a basket of six trade-weighted peers, rebounded from an earlier
0.6 percent slide.
It was up 0.1 percent against the yen at 109.10 yen,
after touching a five-month low of 108.70. The euro was down 0.3
percent at $1.0630, after rising as high as $1.0677.
The euro and euro zone bond yields were also vulnerable to
investor unease about the French presidential election and the
victory chances of both far-right leader Marine Le Pen, who has
pledged to seek to take France out of the euro, and far-left
candidate Jean-Luc Melenchon, who has seen his support climb.
"I think the price action in core yields is mainly shaped by
the rising geopolitical concerns but also French election nerves
increasing safe-haven flows," said ING strategist Martin Van
In commodities, oil prices recovered earlier losses. U.S.
crude rose 0.2 percent to $53.20 a barrel, and global
benchmark Brent was also up 0.2 percent at $55.96.
Gold pared earlier gains but hovered near a
five-month high hit earlier in the session. It was flat on the
day at $1,286 an ounce.
(Additional reporting by Abhinav Ramnarayan; editing by John