US stocks were little changed at the open on Wednesday as investors kept up their wait for Federal Reserve Chair Janet Yellen’s speech on Friday for clues on the timing of an interest rate hike.
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ENERGY: Oil prices extended losses.
Canada’s main stock index opened lower on Wednesday as RBC boosted its dividend after a strong quarter.
The People’s Bank of China on Thursday set the yuan reference point against the United States dollar at 6.6602, 182 basis points or 0.27 per cent weaker than Wednesday. Britain’s FTSE 100 added 0.5 percent to 6,863.07. U.S. gold slipped 0.4 per cent to $1,340.70 an ounce.
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.
SUMMER LULL: Global markets were otherwise subdued as trading volumes were thin amid the summer holidays.
Currency markets are subdued as investors wait to see what’s in store at the central banker symposium after Fed vice chairman Stanley Fischer signalled in a speech last weekend that a 2016 rate hike was still under consideration and that measures of employment and productivity in the U.S. economy were close to meeting the central bank’s goals. “Investors are positioning themselves largely on Yellen’s speech with expectations that her message would be quite hawkish in terms of the outlook for the USA economy and the possibility of a rate hike”, said Vyanne Lai, an economist at National Australia Bank.
Stocks also caught a downdraft from Europe, where the Stoxx Europe 600 was down 1%, led lower by shares of pharmaceutical companies. Given that some Fed members have recently commented publicly that a rate hike could come as early at the September 20-21 meeting – when the central bank’s decision-making Federal Open Market Committee next meets – such speculation is not surprising.
The Nikkei Stock Average NIK, -0.25% was down 0.3% at 16,551.79 points, tracking declines in the US market. Hong Kong’s Hang Seng shed 0.4 percent to 22,912.02 and the Shanghai Composite Index in mainland China gained 0.3 percent to 3,093.12. Australia’s S&P ASXASX 0.14 % 200 fell 0.4% following recent declines in commodities prices. Benchmarks in Taiwan and New Zealand rose. Those in Indonesia and the Philippines fell.
In corporate news, RBC reported better-than-expected quarterly results, with funds set aside to cover bad loans falling thanks to higher oil prices. USA benchmark crude dropped $1.71 to $46.81 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.70 to close at $47.41 a barrel on Monday.
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European stocks (http://www.marketwatch.com/story/european-stocks-choppy-as-miners-slump-but-banks-march-higher-2016-08-24) were choppy, and the U.S. Dollar Index (http://www.marketwatch.com/story/dollar-wobbles-as-traders-stick-to-the-sidelines-before-jackson-hole-2016-08-24) was flat.
