Federal Reserve chair Janet Yellen will be a key speaker and any indication a USA rate rise is coming would likely be bad for gold as the metal traditionally moves counter to interest movements.
Advertisement
European stocks advanced in early trading. France’s CAC 40 rose 0.7 per cent to 4,420.93 while Germany’s DAX climbed 0.8 per cent to 10,582.05.
The Dow Jones industrial average .DJI rose 17.88 points, or 0.1 percent, to 18,547.3, the S&P 500 .SPX gained 4.26 points, or 0.2 percent, to 2,186.9 and the Nasdaq Composite .IXIC added 15.48 points, or 0.3 percent, to 5,260.08. US stocks were poised to open higher, with both Dow and S&P 500 futures up 0.2 percent.
Investors did respond positively to a survey from the 19-country eurozone that showed business activity expanded in August at a modest but steady pace.
On the data front, investors will eye the release of Markit’s preliminary manufacturing purchasing managers’ index at 1445 BST and new home sales at 1500 BST.
Janet Yellen, chair of the Federal Reserve, will deliver remarks at an annual conference on monetary policy, with investors keen for any indication of what near-term interest rate decisions will be.
Investors are waiting to see whether she will echo the hawkish views expressed by Fischer and New York Fed President William Dudley, or take a more subdued stance in line with the July Fed policy meeting minutes, which suggested the central bank was not in a hurry to raise rates.
QUOTABLE QUOTE: “Markets continue to trade eerily quietly in the low-volume low-volatility dog days of the Northern hemisphere summer”, said Angus Nicholson if IG Markets in Melbourne. “Investors are still not buying a 2016 rate hike, even following [Fed Vice Chairman] Stanley Fischer’s comments over the weekend regarding the economy”, said Craig Erlam, senior market analyst at Oanda, in a note.
Japan’s Nikkei.N225 went the other way and eased 0.6 percent as the yen ground higher on the dollar.
The U.S. dollar continued to trade lower, despite the U.S. Department of Housing and Urban Development reporting today that new U.S. single-family home sales unexpectedly rose in July and climbed to their highest level in almost nine years.
In commodities, oil prices returned to positive territory after media reports indicated that Iran may be willing to support a production freeze at next month’s producer meeting in Algeria. WTI crude (U.S.:US10Y) and Brent (U.S.:US10Y) last stood around $47.00 per barrel and $48.75 respectively, with prices being dampened after Goldman Sachs warned that the price rally in August had been overdone.
The U.S. dollar fell broadly against the major currencies as traders await more clear signals of interest directions from the Federal Reserve officials later this week.
Advertisement
At this time, the USD/CAD pair increases 0.10% to 1.2925, having previously announced session peak at 1.2933.
