Dow futures and the broader S&P 500 futures are expected to open 0.6 percent lower.
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South Korea’s Kospi rose 0.5 per cent and Australian stocks advanced 0.3 per cent. Hong Kong’s Hang Seng rose 1.1 per cent and Shanghai was flat.
The US dollar is trading a little higher again today having come off a little yesterday on Brainard’s comments, which again suggests that traders are only writing off September and a hike this year remains very much on the cards, which is bullish for the greenback.
That did not happen.
Stocks rose steadily to close at session highs, rebounding from Friday’s rout, as Fed Gov. Brainard cautioned for “prudence” in raising interest rates.
“The risk is that Ms Brainard goes from dove to hawk and signals a rate hike on the last day before the Fed begins its pre-meeting quiet period”, said Jasper Lawler, an analyst at CMC Markets.
Copper climbed off a 12-week low as US rate hike jitters subsided.
The New Zealand dollar gained after Federal Reserve governor Lael Brainard warned against hiking interest rates too early, citing tepid inflation and a slack labour market, which cooled speculation the USA central bank may be poised …
Brainard said on Monday the labor market might still tighten further without putting pressure on inflation.
Adding to the day’s complexity for bond traders, Fed Governor Lael Brainard spoke within minutes of the offerings, in the final scheduled comments before officials go into their traditional quiet period ahead of their next policy decision, slated for September 21.
US Treasures briefly rose on Brainard’s comments, then fell, pushing yields on the benchmark 10-year note one basis point higher to 1.68 per cent at 1.45pm NY time.
ANALYST’S COMMENT: “The continuous debate surrounding the prospect of a US rate rise continues to dominate market sentiment as USA policymakers continue to gear up the markets for a further rate rise later this year”, said Michael Hewson, chief market analyst at CMC Markets.
Manuel Oliveri, a strategist at Credit Agricole in London, said all of those moves look tied up with a wobble in global markets related to concerns about overpricing of government bonds and the ability of central banks forever to pump more money into the financial system.
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Commodities were mixed as the December gold contract fell US$8.90 to US$1,325.60, while the October crude oil contract gained 41 cents at $46.29 per barrel.
