What had been just a sleepy August is turning into an increasingly painful one for USA equity market bulls.
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In addition to George, two close Yellen allies – William Dudley, president of the Federal Reserve Bank of NY, and Stanley Fischer, the Fed’s vice chairman – have suggested in the past week that a strengthening economy will soon warrant a resumption of the rate hikes the Fed began in December.
The local prices ended unchanged on Thursday from the previous day. Her remarks are “pointing more toward December than September as they await more data”, he said in a telephone interview.
SAN FRANCISCO Aug 26 Wall Street will fixate on a wave of US economic data next week, crested by payrolls data on Friday that could sway expectations about the timing of future interest rate hikes and spark volatility in record-high stock prices.
Markets quickly priced in the possibility that the Federal Open Market Committee meeting on September 20-21 could turn “live”.
PURE POWER: Pure Storage rose $1.01, or 9 percent, to $12.84 after reporting a loss far smaller than forecasts.
Expectations for a rate increase climbed after Fischer spoke, with traders pricing in a 42 per cent probability of a move next month, and a almost 65 per cent chance the central bank will act by December.
“I believe that our economic conditions are increasingly becoming more favourable for a Fed Fund Rate increase – especially in the past couple of months”, said Yellen during a speech at the Annual Federal Reserve Conference Meeting on Friday, August 26, in Jackson Hole, Wyoming, US.
The Australian market opened lower following the mixed lead from Wall Street after Yellen advocated the gradual tightening of interest rates.
KEEPING SCORE: The Dow Jones industrial average rose 76 points, or 0.4 percent, to 18,524 at 11:04 a.m.
Even two rate hikes before 2016 was out were possible, a top United States central bank official said.
The S&P 500 rose as much as 0.7 percent and declined by as much as 0.6 percent during the session.
About 6.57 billion shares changed hands in US exchanges, compared with the 6.16 billion daily average over the last 20 sessions. Traders were pricing in a 60.2 per cent chance of a hike in December, up from 51.8 per cent on Thursday.
The benchmark 10-year U.S. Treasury was yielding around 1.6 percent on Monday morning, low by historical standards, but well above the negative yields in many European and Japanese bonds. The Australian dollar initially rose 0.18 percent to $0.7690. France’s CAC 40 edged down 0.2 percent. Yellen is to address the gathering on Friday. US crude ended the session 31 cents higher at $47.64.
The dollar rallied quickly off Yellen comments that were perceived as hawkish, said Minh Trang, senior FX trader at Silicon Valley Bank in Santa Clara, California.
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Brent crude futures settled at $49.92, up 25 cents or 0.5 percent.
