Another dove, Fed board member Lael Brainard, is scheduled to give a speech Monday, raising speculation that she, too, “will use this appearance to signal a September rate hike”, economists Kevin Cummins and Michelle Girard of the Royal Bank of Scotland, wrote in a research note Monday. [NW1N17W00M] The comments solidified the view the USA central bank would leave interest rates unchanged next week.
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ENERGY: The price of oil recovered some of its 3 percent overnight drop which followed the International Energy Agency’s remarks about oil demand because of a slowdown in the global economy. “All the talk about a possible rate hike in September turned out to be noise”, said Koichi Yoshikawa, executive director of finance at Standard Chartered Bank’s Tokyo branch.
At 10:03 a.m. ET, the Dow is down 195 points (1.07%), the S&P 500 is down 21 points (1%) and the Nasdaq is down 49 points (0.95%).
The local currency was little changed at 97.13 Australian cents from 97.09 cents, gained to 4.9083 Chinese yuan from 4.8857 yuan, rose to 65.42 euro cents from 65.07 cents, was little changed at 55.09 British pence from 55.12 pence. and slipped to 74.81 yen from 75.03 yen.
While higher rates can increase demand for the USA dollar, markets have received conflicting signals in recent weeks, with members suggesting both readiness to move and urging forbearance. The change came after the S&P 500 United States index reported a 1, 47% appreciation in the American market, which led a relief on the global financial market. Britain’s FTSE 100 edged 0.1 percent lower to 6,692.22. 30-year government bond yields jump * Weak rand may prompt platinum ETF liquidation -Commerzbank * Platinum, palladium at July lows (Recasts first paragraph, updates prices, adds comment, second byline, NEW YORK dateline) By Marcy Nicholson and Eric Onstad NEW YORK/LONDON, Sept 13 (Reuters) – Gold fell for the fifth straight day on Tuesday, weighed down by a firmer dollar and a jump in Treasury yields as well as uncertainty about whether the USA central bank will raise interest rates next week.
Traders trimmed their views on the likelihood of a September rate hike to 15 percent, from 24 percent on Friday, and for a December hike to 54.5 percent from 59.2 percent, according to the CME Group’s FedWatch tool. “Last night’s comments from Brainard acted as a neat counterweight to recent hawkish rhetoric”. In Japan the Nikkei 225 gained 0.3 percent and South Korea’s Kospi rose 0.4 percent. Hong Kong’s Hang Seng index lost 0.3 percent to 23,215.76, while Australia’s S&P/ASX 200 fell 0.2 percent to 5,207.80.
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Markets are mostly expecting Clinton to win the presidency in November and have not factored in the implications, both economic and for national security, should Republican nominee Donald Trump prevail. It’s also taken as a good sign for the gold market, however, because the longer that interest rates remain low, the longer the opportunity cost of holding gold remains negligible.
