In currencies, the dollar was little changed at ¥102.06 after Thursday’s 0.3% loss, and was heading for a 0.6% decline for the week. A measure of economic data surprises slumped to the lowest since June.
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Nominal yields have fallen so much that banks, insurers and pension funds, which use the spread between short- and long-term yields to generate profits, are losing money.
The gatherings come at a time of increasing anxiety that central bankers are considering winding back on years of cheap cash that have helped fuel a rally in global equities.
After charging through the second quarter, the US consumer is showing signs of exhaustion at the start of the second half of 2016, with core sales falling 0.1 percent in August. However, data in recent weeks have shown signs of weakness, including the ISM surveys showing a decline in new orders and production in US factories in August and service sector activity at a six and a half year low.
The Nikkei article said that, rather than abandoning its controversial negative interest rate policy, “the BoJ will instead consider taking the minus 0.1 per cent deposit rate further into negative territory”.
The Dow Jones industrial average was up 200.65 points, or 1.11 percent, to 18,235.42, the S&P 500 gained 23.57 points, or 1.11 percent, to 2,149.34, and the Nasdaq Composite added 77.71 points, or 1.5 percent, to 5,251.48. Fed Governor Lael Brainard, who spoke September 12 in the central bank’s final scheduled comments before the gathering, said prudence is warranted in the Fed’s rate path as boosting borrowing costs poses risks.
“The BOJ promised a major report on the course of monetary policy at this meeting, and market participants have been speculating wildly on what policymakers in Japan will do next”.
Brent crude futures fell $1.25, or 2.7 percent, to settle at $45.85 per barrel, while US crude slid $1.32, or 2.9 percent, to settle at $43.58.
The U.S. dollar eased from an eight-day high against the yen as skepticism grew that the Bank of Japan would intensify its stimulative monetary policies next week.
But with over three years having passed since deploying its asset-buying program, the central bank will abandon the two-year timeframe it set for achieving the price goal, they said.
In response to a separate question, around one-quarter of 47 economists said their conviction around a Fed hike this year had increased in the past month, while about 60 per cent said it had stayed the same. What’s not easy is the Federal Reserve’s decision and statement on interest rates. There are a couple of different things we should be focused on as we approach the election.
“More than rates, the curve shape has been consistent, and telling a strong story”, said Aaron Kohli, fixed-income strategist in NY at BMO Capital Markets Corp., one of the 23 primary dealers that trade with the Fed. Townswick said the market favors Democrat Hillary Clinton because she is more predictable than Republican Donald Trump. “We see no real reasons for why we’d get a big shift, so more of the same, consistent with modest to mediocre ongoing growth of around one and a bit percent”.
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US economic indicators released Thursday pointed to continuing softness in consumer spending and inflationary pressures as the US Federal Reserve prepares to review interest rate policy next week. But the market could break out if there’s a solid revision to GDP, followed by better earnings.
