Investors are wary Yellen will hint at a near-term interest rate hike, which could divert some of the massive liquidity that has underpinned emerging markets, after hawkish comments from a slew of other Fed officials recently.
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In Australia, the ASX 200 was down 0.2 percent, with most sectors falling in early trade. The so-called core-core consumer prices, which excludes food and energy items, rose 0.3 percent on-year in July, but fell 0.2 percent from the previous month. They’re on track for declines of 1.2 percent and 0.8 percent respectively.
George said Thursday that if the outlook for the economy unfolds as she expects, she would vote for a rate hike at the Fed’s next policy meeting, September 20-21.
Swedish biometric firm Fingerprint Cards fell 5.8 percent, the worst performer in the STOXX 600 index, after Nordea initiated its coverage of the stock with a “sell” recommendation, saying it saw the company’s earnings hitting a peak this or next year.
John Bellows, portfolio manager at Western Asset, explains the apparent contradiction this way: While Yellen may be optimistic about the economy near-term, she is also anxious longer-term “about both downside risks and the limited efficacy of policy at the zero lower bound”, Bellows wrote Thursday. Some believe Yellen could echo their signals. Gold prices are down 2.4% since the beginning of the month.
Security Bank, which will replace Bloomberry in the PSEi, ended 0.55 percent higher.
Brent crude futures LCOc1 rose 47 cents to $49.52 a barrel by 12:45 p.m. EDT (1645 GMT), after settling down 1.8 percent on Wednesday. The services counter gained 1.32 percent while the industrial counter was also slightly up. Eastern, Yellen may signal the Fed is ready to raise interest rates next month, or perhaps at the group’s final meeting of the year in December, after the result of the US presidential election. The KBW Nasdaq Bank index rose 0.39 percent, its best day in almost two weeks.
European markets closed lower: London’s FTSE shed 0.3 per cent, Paris lost 0.7 per cent and Frankfurt slipped 0.9 per cent.
The dollar was also 0.1 percent weaker versus the yen at 100.48 yen JPY= , having risen a modest 0.3 percent so far this week.
The Australian dollar nudged up 0.25 percent to $0.7637 AUD=D4 .
US crude’s West Texas Intermediate (WTI) futures rose 33 cents, or 0.7%, to $47.1/bbl.
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The price of gold fell $5.10 to $1,324.60 an ounce, silver fell 7 cents to $18.62 an ounce and copper was little changed at $2.08 a pound.
