US stocks are slightly higher Monday morning.
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Traders trimmed their views on the likelihood of a September rate hike to 15 per cent from 24 per cent on Friday, and for a December hike to 54.5 per cent from 59.2 per cent, according to the CME Group’s FedWatch tool.
Boston Fed President Eric Rosengren said higher rates were needed to prevent the economy from overheating, while normally dovish Governor Daniel Tarullo also signalled his openness to a 2016 increase in a television interview.
She said the labor market might be farther from full strength than some economists believe, which would suggest “the case to tighten policy preemptively is less compelling”. Fed board governor Lael Brainard told the Chicago Council on Global Affairs, that Federal Reserve should avoid removing support for the USA economy too quickly because of potential weakness in the labor market and risks of foreign economic downturns.
Other markets: The dollar inched higher against other major currencies (http://www.marketwatch.com/story/dollar- flattens-out-in-wake-of-dovish-fed-signal-2016-09-13), sending the ICE Dollar Index 0.1% higher to 95.185. The dollar fell for the first time in four sessions as the odds for a rate hike next week slid to 22 percent. Australian stocks are expected to open higher in reaction to strong closes by the Dow Jones Industrial Average, the NASDAQ Composite and the S&P 500 Index. JPMorgan Chase fell 65 cents, or 1 percent, to $66 and Citigroup shed 64 cents, or 1.3 percent, to $46.54. It was last up 0.3 percent. The stock was the top percentage gainer on the S&P. Asian stocks finished lower, tracking Wall Street’s large decline on Friday. U.S. gold futures were up 0.7% at $1,334.50/oz.
Regional investors followed their USA and European counterparts in heading for the exit after two Federal Reserve officials on Friday lent their support to a hike in U.S. interest rates as soon as this month.
With the odds on a USA rate hike increasing the dollar rose against the yen, pound and euro Friday but edged back Monday.
Investors had speculated more hawkish remarks in Monday’s speech would have signaled an imminent increase at the end of the September 20-21 meeting.
ASX-listed Fortescue Metals climbed 2.87 percent, after the company announced it would repay $700 million of its 2019 term loan, and save on annual interest valued at about $26 million.
New Zealand’s two-year swap rate edged up one basis point to 2.02 percent at 5pm in Wellington, and 10-year swaps were unchanged at 2.53 percent.
The central bank last raised borrowing costs in December, ending seven years of near-zerorates.
Brent crude was down 0.7 percent at $47.98 a barrel after rising 0.65 percent overnight on a weaker dollar and stronger US equity markets.
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US benchmark crude fell 95 cents to $44.93 a barrel in electronic trading on the New York Mercantile Exchange. (6723.TO) said it’ll buy the USA semiconductor maker for $3.2 billion (http://www.marketwatch.com/ story/japans-renesas-to-buy-intersil-for-32-billion-2016-09-12).
