The Federal Reserve may raise interest rates as soon as next month, according to New York Fed President William Dudley, who warned investors that they are assigning a low probability to an increase in borrowing costs in the near future.
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In term of recent economic data release, the USA initial jobless claims for the week ending 12 August 2016 came at 262k, lower than the expectations of 265k, from 266k in the previous week, highlighting the U.S. job market remains healthy.
“Nevertheless, with inflation continuing to miss to the downside, the case for caution remains strong”.
Six of the 10 major S&P 500 indexes were lower, with the interest rate sensitive utilities .SPLRCU falling the most by 0.66 percent.
Additionally, the Conference Board released a report showing that its leading economic index rose by 0.4 percent in July following a 0.3 percent increase in June.
South Korea’s won rose after its biggest one-day loss in nearly two months as Federal Reserve minutes tempered speculation U.S. interest rates will increase this year.
“The Fed minutes provided a much more comprehensive summary of the views of different Fed members and the market seems to have been taken a bit by surprise by how dovish numerous Fed members sounded”, wrote Angus Nicholson, market analyst at IG in Melbourne. Williams does not have a vote on Fed policy this year, but his views are seen as influential due to his longstanding relationship with Fed chairwoman Janet Yellen. It is down 1.5 per cent for the week. “We are sceptical that Japan is close to intervening directly to weaken the yen, and even if intervention was undertaken it is likely to offer only temporary relief”, said Lee Hardman, currency analyst at Bank of Tokyo Mitsubishi. It is still on track to lose 1.1 percent on the week. The common currency is headed for a gain of 1.6% this week.
In oil markets, Brent crude traded at $49.76 a barrel on Thursday, down 0.18 percent, while USA crude was at $47.05 a barrel, up 0.56 percent. That followed a gain of 2.1 per cent on Thursday. It is poised to add 8.3% for the week.
“When we did not receive the unambiguous hawkishness from the FOMC minutes, that kind of opened up the door to additional (dollar) selling”, said Kathy Lien, managing director at BK Asset Management in NY. It was last up 0.7 per cent at $48.61 a barrel.
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The three indexes ended lower on Tuesday after Dudley’s comments.
