Euro zone government bond yields fell as some investors bet the weak US data, which followed weaker-than-expected jobs numbers on Friday, would pressure the European Central Bank to ease monetary policy further.
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For investors, the lukewarm report gave no clear signals on timing, with market-implied odds of a rate increase this month holding at about one-in-three. San Francisco Fed President John Williams on Tuesday said the USA economy is “in good shape and headed in the right direction” without indicating whether he was leaning one way or another regarding a rate increase.
Meanwhile, the dollar index dropped 1 percent to 94.821, it’s lowest since August 26.
“Recent hawkish comments from Fed officials were probably meant to warn markets against being too complacent about the chance of a rate hike, rather than to make markets fully price in a rate hike”, Shirota said.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 percent, extending gains of 2.7 percent over the last two days, to claim a level last seen in July a year ago. The Australian dollar jumped 1.3 percent against the greenback after the data.
Clinton, a former US senator from NY and secretary of state, also said that daughter Chelsea Clinton’s involvement in the Clinton Foundation charity will be decided after the November 8 election.
U.S. JOBS: Job gains slowed in most major industries in August and wages rose only slightly.
GOLD BARS in London wholesale trade rose near 3-week highs against a weakening Dollar and touched 1-month highs against the Chinese Yuan on Wednesday, as poor US data saw traders cut their bets of a US Fed rate rise at the September meeting in 2 weeks’ time.
The Fed is “not getting support from data for a rate increase, and so we’re seeing the market creep a little higher today”, said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
The Dow Jones industrial average .DJI fell 37.8 points, or 0.2 percent, to 18,500.32, the S&P 500 .SPX lost 2.88 points, or 0.13 percent, to 2,183.6 and the Nasdaq Composite .IXIC added 0.34 points, or 0.01 percent, to 5,276.25. Yields fell as low as 1.536 percent, their weakest since August 26.
The benchmark 10-year note yield was little changed at 1.53 percent as of 3:41 p.m.in NY, according to Bloomberg Bond Trader data. Rates on two-year notes, which tend to be more sensitive to the monetary policy outlook, dropped six basis points to 0.73%.
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On Tuesday, Brent futures for November delivery fell 37 cents, or 0.8 percent, to settle at $47.26 a barrel. Brent crude, the benchmark for global oil prices, rose 3 cents to $46.86 a barrel. Because of the U.S. Labor Day holiday, electronic transactions from Monday were booked with Tuesday’s for settlement purposes.
