Markets elsewhere across Europe may edge higher at open as oil prices rebounded and investors turned skeptical about the Federal Reserve’s plans for raising interest rates. Market attention will now turn to Friday’s all-important US employment data which will provide more insight on the possibility of a rate hike in the U.S.
Advertisement
Traders are now putting on 44 percent odds of a Fed rate hike in September and 63 percent odds of a December hike, having added to their bets in the wake of comments by Fed chairwoman Janet Yellen and vice chairman Stanley Fischer at the end of last week.
Upbeat U.S. data released on Tuesday helped the dollar extend gains, with a consumer confidence index rising to an 11-month high in August.
The next key indicator is Friday’s jobs report for August, which is expected to show that employers added 180,000 jobs in the month, according to the median estimate of 89 economists polled by Reuters.
The S&P 500 was down 4.35 points, or 0.2 per cent, at 2,176.03.
The Dow Jones Industrial Average gained 0.6 percent and the S&P 500 0.5%, with the banking sector strong on expectations that higher rates from the Fed will boost their lending margins.
The Nasdaq Composite was down 9.62 points, or 0.18 per cent, at 5,222.71.
“A somewhat faster move to rate normalization may defer somewhat how quickly we achieve the dual mandate goals of full employment and price stability, but could reduce the risk of a larger divergence from the dual mandate in the next downturn”, Rosengren, a voter on policy this year, said in prepared remarks to be delivered in Beijing.
The Australian dollar edged up 0.2 per cent to $0.7526 on bargain hunting after its overnight slide to a one-month trough of $0.7500 against the broadly stronger U.S. currency. Friday’s non-farm report for August, a closely watched barometer of the jobs market, could reinforce hawkish messages from Fed officials.
North Sea Brent also fell 66 cents to settle at US$49.26 per barrel on the Intercontinental Exchange in London.
In New York, a barrel of West Texas Intermediate for October delivery fell 66 cents to close at US$46.98. Given what the other consumer data has told us since the vote, I don’t think we’ll see a dramatic change in the numbers and any change at all will probably be put down to it being a knee jerk reaction, unless it’s followed by a couple more months to support it. Benchmark 10-year US Treasury yields were last at 1.565 per cent, roughly unchanged from late Monday.
Advertisement
The stronger dollar weighed on safe-haven gold prices.
