Few expect the Fed to raise interest rates in September, but investors will watch the news conference and forecasts for hints at what the central bank might do later this year. WebMD fell $3.24, or 6.2 percent, to $48.73 and it is down 27 percent since May 25. The dollar hit a six-day low against the yen of 101.59 yen.
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The Aussie dollar was the mover of the session, trading in a range of $US0.7573 to $US0.7474.
Banks rebounded from the worst week in two months to bolster the advance, with Citigroup Inc. and JPMorgan Chase & Co. rising at least 1.1 per ent.
Negative yields have not been the salve that was promised, and there are now more concerns about the health of banks which need a steeper curve to make money.
The U.S. economy is far from robust, posting a sub-par 1.2percent increase in second quarter gross domestic product.However, Japan, the world’s third-biggest economy, is strugglingeven more, eking out just 0.7 percent growth in the same period.
In the eurozone, Frankfurt’s DAX 30 jumped 1.0 percent and the Paris CAC also regained some of last week’s losses, closing 1.4 percent higher. It cut rates to 0.25 percent in early August and relaunched an asset-purchase programme to cushion the economic blow from Brexit. In the view of most economists, the Fed wants more time to assess the health of the US economy, the risks from overseas and the prospect that low inflation will soon reach the central bank’s 2 percent target rate.
Energy shares slipped 0.1 per cent, pulling back as oil prices pared gains during the session.
We view the recent global surge in yields (centering on long-term bonds) as representing an adjustment to reasonable levels following excessive drops in the wake of the Brexit vote. Canadian inflation and retail sales data are due on Friday. Weak retail, industrial and inflation data for August have recently undermined confidence in the USA economy and likely pushed the Fed to err on the side of caution. One for the radar, but AUD/USD is showing absolutely no correlation with this key terms of trade. Brent edged 0.1 per cent lower to US$45.91.
“We are relatively neutral on the government-bond market and we don’t have a large position to our risk exposure in Japan”.
When the Fed ends its latest policy meeting Wednesday, it’s expected to leave the short-term rate it controls at the low level where it’s been for 10 months.
Spot gold added 0.2 percent to $1,315.84 an ounce, on expectations that the Fed will stand pat on rates. Traders are looking for a break above $0.7567 for further gains in the currency. The Reserve Bank of Australia’s new governor Philip Lowe will appear before a parliamentary economics committee on Thursday, his first official appearance as chief.
Insurer Manulife Financial Corp added 1.3 per cent to $18.27 and the overall financials group gained 0.7 per cent.
The New Zealand dollar was little changed ahead of the latest dairy auction tonight and statements from the Bank of Japan, Federal Reserve and Reserve Bank of New Zealand this week.
The JPX-Nikkei Index 400 gained 0.8 percent to 11,868.39.
Global stocks mostly rose Monday, buoyed by a boost in oil prices, as traders looked to upcoming USA and Japanese central bank policy meetings for hints of future action. The Nasdaq composite fell 9.54 points, or 0.2%, to 5,235.03.
Oil had rallied on Monday before settling off its highs on scepticism over Venezuela’s bid to talk up a potential OPEC output freeze, and on indications US crude stockpiles had risen last week. It rallied more than 2 percent earlier, reaching $46.93.
OIL: Benchmark U.S. crude added $1, or 2.3 per cent, to $44 a barrel in NY.
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USA crude prices were up 1.6 per cent to US$43.71 a barrel, while Brent added 1.3 per cent to US$46.34.
