The most recent case in point was Tuesday’s release of U.S. consumer spending for April, which showed a 1% increase against prior expectations of 0.7%, for the largest monthly gain since September of 2009.
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The U.S. economy is on track to grow by a 2.9 percent annualised rate in the second quarter following surprisingly strong data on domestic personal spending in April, Atlanta Federal Reserve’s GDPNow forecast model showed on Tuesday.
Hong Kong’s Hang Seng index gained 0.9 per cent, heading for a decline of 1.2 per cent in May.
The dollar rose to 111.15 yen in Asian trading from 110.37 yen Friday in NY – the yen’s weakest level in about a month.
US consumer spending recorded its biggest increase in more than six years in April as households stepped up purchases of automobiles, suggesting an acceleration in economic growth that could persuade the Federal Reserve to raise interest rates soon.
Because of Yellen’s emphasis on the labour market, the US nonfarm payrolls report on Friday will attract more than the usual attention. Solid readings could further heighten expectations for a move as soon as the Federal Reserve’s next policy meeting on June 14-15.
Economists predict the report would show that United States employers added 170,000 jobs, slightly more than they did in April.
The jobs report was expected to show an increase of 160,000, the same as the previous month.
A June rate hike on the recent “brief” run of better economic data and before the Brexit uncertainty would “signal a loss of patience, concern about falling too far behind the curve, aversion to even a moderate inflation overshoot and a desire to assert the option to hike three times by end 2016”, Mr Guha said.
When it scaled toward ¥111.40 in late afternoon trading, the dollar met with position-adjustment selling.
The euro was also flat at $1.11470 but hovered near a two-and-a-half-month low of $1.1097 hit in the previous session. According to the U.S. Energy Information Administration, retail gas prices remain at their lowest since 2009 on a year-over-year basis, with average gas prices at $2.30 per gallon on May 23.
Traders are now looking to the June 2 meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, where it is hoped a deal on reducing production can be reached.
Yields rose in all maturities but the trend was most pronounced in short-term Treasurys, as they are most sensitive to changes in the fed-funds rate and tend to spike when rate-hike expectations increase.
USA markets were closed on Monday for the Memorial Day holiday. They were up 0.3 percent at $49.46 on Tuesday, lifted by the start of the peak demand summer driving season in the U.S. They are set for an 8.2 percent jump in May.
Brent crude added 0.3 percent to $49.48 a barrel, after gaining 1 percent last week.
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Spot gold was last at $1,202.20-1,202.50 per ounce, down $10.50 from Friday’s close after hitting as low as $1,200 earlier in the day.
