The Footsie fell back again in early trading, extending yesterday’s retreat as markets tread water ahead of a key speech tomorrow from Federal Reserve chair Janet Yellen which could bring hints of when United States interest rates will next be raised.
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Investors will be looking to Yellen’s speech at the Jackson Hole symposium on Friday for any indications of a near-term USA rate hike.
In opening deals, the FTSE 100 index was down 39.3 points, or 0.6 per cent at 6,796.4, having closed 32.73 points lower yesterday as a stronger dollar on rate hike hopes hit commodity prices, which are denominated in the USA currency.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.3 percent. While profits so far have been better than feared, companies could come under pressure as wages rise, and the USA election could be a source of market turbulence in the fall, he said. USA gold slipped 0.4 percent to $1,340.70 an ounce. The gauge is still up nearly 3 percent this month, compared with a 0.6 percent advance for the MSCI World Index.
Futures markets on Wednesday were indicating an 18 percent chance the US central bank would hike rates at its policy meeting next month, and roughly 50 percent odds of a rate increase in December, according to CME Group’s FedWatch tool.
On currency markets, sterling slipped back after a recent rally in the absence of any fresh direction, with the latest CBI retail sales survey the only interesting piece of United Kingdom data due today.
Wall Street closed lower on Wednesday, albeit in thin trading, weighed down by healthcare and materials stocks. Australia’s S&P ASXASX 0.14 % 200 fell 0.4% following recent declines in commodities prices. Stock futures were broadly flat in Asian trade.
“With 40 hours to go before Janet Yellen’s testimony at Jackson Hole, the dollar has finally caught a bid”, Kathy Lien, managing director of FX strategy at BK Asset Management, said in a note.
The greenback traded slightly up against other major currencies on Thursday morning. The euro was trading at 1.1270 and the pound remains near the top of its trading range at 1.3218.
Gold prices declined for the third time in four days Wednesday, reaching their lowest level in a month as investors remained puzzled over the direction of Federal Reserve policy.
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USA crude CLc1 was down a shade at $46.76 a barrel following a roughly 3 percent drop overnight after an unexpectedly large inventory build in the world’s biggest oil consumer renewed worries about oversupply.
