Asian stocks rose, with Japanese shares advancing in August for the first time in seven years, as banks rallied and the yen weakened amid expectations for an increase in USA interest rates this year.
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U.S. consumer confidence rose to an 11-month high in August, with households more upbeat about the labour market. The data, which beat economists’ expectations for a dip to 97.0 according to a Reuters poll, stoked expectations that the Fed could raise rates this year after top Fed officials have said recently that such a move was possible. Futures ended yesterday indicating a 36 per cent chance that the Fed will raise rates in September, up from 24 per cent a week earlier, and Fischer has said U.S. payrolls data on Friday will be key to the central bank’s decision making. Financials, which tend to benefit in a rising interest-rate environment, gained the most among sectors, up 1%.
Apple dragged down USA stocks after European Union antitrust regulators ordered the company to pay about US$14.5 billion in back taxes to the Irish government, but a gain in financial stocks limited the impact. The index stood at 96.7 in July. New Zealand’s S&P/NZX 50 Index added 0.2 percent.
The dollar’s recent strength was due to “the Fischer comments made at the end of last week, which has spurred the belief that the September meeting could be very much alive”, said Daragh Maher, New-York-based head of USA currency strategy at HSBC Holdings.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.4%, recouping around half of Monday’s loss.
S&P 500 Index futures were little changed after the gauge closed within 0.5 per cent of a record.
Brent crude futures LCOc1 added 0.2 percent to $47.00 per barrel, after falling 2.8 percent overnight but still gaining 11 percent for August. The Nasdaq Composite fell 9.77 points, or 0.2%, to 5213.22 but still logged a monthly gain of 1%.
U.S. Treasurys were mixed, with the two-year note yield near 0.80 percent and the benchmark 10-year yield around 1.57 percent. Crude oil fell for a third day. A strong greenback makes fuel purchases more expensive for countries using other currencies domestically.
A gauge of energy shares dropped 0.3 percent after the Energy Information Administration showed crude inventories climbed 2.28 million barrels, more than the 1.3 million-barrel gain projected by analysts. On the Nasdaq, 1,602 issues rose and 1,128 fell.
Energy producers dragged down equities as crude fell below $45 a barrel after a report showed USA stockpiles climbed by more than projected.
South Korea’s Kospi index lost 0.7 percent. “But we choose the pace on the basis of data that are coming in”, Fischer said in the interview.
“A strong number would refuel expectations for a September rate hike and support the dollar”. Spot gold prices XAU= were last down $10.3, or 0.78 percent, at $1,312.71 an ounce.
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A man is reflected on a screen displaying a graph showing movements of the Tokyo Stock Exchange Stock Price Index (TOPIX), outside a brokerage in Tokyo.
