“The Fed will only be raising rates when they’re confident growth is on a sustainable track”, Shane Oliver, a global strategist at AMP Capital Investors Ltd.in Sydney, said. The Fed Chair felt dehydrated under the bright lights, Smith said.
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Much of the recent price weakness is due to special factors such as a strong dollar and low oil prices, which are likely to fade, Yellen said, allowing us inflation to rise to a 2-percent goal over the next few years. “Equity markets have rallied following her comments that she still wanted to increase rates this year and that she had held her vote for change”.
ASIA’S DAY: Japan’s Nikkei 225 recouped earlier losses to finish up 1.8 percent at 17,880.51.
USA stock futures were off earlier highs but were still up 0.1%, suggesting calmer trading later in the global session.
The benchmark German DAX index is now up 270 points or 2.86 percent at 9,697, while France’s CAC 40 index is climbing 3.4 percent and the U.K.’s FTSE 100 is rising 2.5 percent.
At last week’s FOMC meeting, policy makers opted to leave interest rates at record lows and delivered what was deemed to be a fairly dovish message – lowering growth and inflation expectations and warning of heightened emerging market risk. “Fed Chair Janet Yellen striking a slightly more hawkish tone (Fed less worried) than last week appears to have gone a fair way to appeasing those cheap money addicts so fearful of continued rate rise uncertainty”.
Her remarks came a week after the U.S. central bank opted at a widely anticipated meeting against enacting the first rate hike in almost 10 years.
“Heading into the end of the week traders and investors are tired and still concerned about China and the ongoing Fed lift-off conversation”, said Chris Conway, head of research, Australian Stock Report.
The us dollar rose against a basket of other currencies while the euro declined 0.67% against the greenback.
There is plenty of hedging in her words, but the bottom line is that the Fed still sees a good chance of liftoff this year, timing the bond market was increasingly questioning as global economic strength wanes.
And the insurance company Manulife Financial Corp. lost 0.2 percent to 20.41 Canadian dollars per share.
In data, the final GDP, final GDP price index, flash services PMI, revised UoM consumer sentiment and revised UoM inflation expectations are expected from the United States later on Friday.
ENERGY: Benchmark US crude was up 37 cents at $45.28 a barrel in electronic trading on the New York Mercantile Exchange.
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There was more positive news from the housing market, as new home sales rose 5.2% in August, reaching their highest rate since 2008.
