Yellen’s speech at the Jackson Hole retreat for central bankers on Friday has come into sharper focus after Fed vice chair Stanley Fischer signaled in a speech last weekend that a 2016 rate hike was still under consideration and that measures of employment and productivity in the United States economy, were close to meeting the central bank’s goals.
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The dissonance of reports showing a surge in American new home sales and a slowdown in manufacturing brought into question the hawkish tone of recent comments from Fed officials, keeping the relative sense of calm across asset classes. Spot gold was at $1,336.76 an ounce at 2.16pm GMT, down 0.8%, while United States gold futures for December delivery were down $16.30 an ounce at $1,329.80.
The local currency rose as high as 73.44 USA cents after the Reserve Bank yesterday reiterated expectations for 35 basis points of further cuts to the official cash rate, but pushed back against critics calling for either a pause or more aggressive action. Earlier in the day, the index fell as much as 1.3% to its lowest in over 6 weeks. After touching an intraday record high, the Nasdaq Composite Index closed up 0.3%. Yellen’s speech there will be closely watched for hints about USA monetary policy and the path of interest rates.
In the NY session, U.S. FHFA house price index for June, U.S. existing home sales data for July and crude oil inventories data are set to be published. The WI shows that the market was expecting that yield to be 0.771 percent, the bonds were finally issued 1.1 basis points lower.
“For the most part, everyone’s pretty much waiting for Yellen”, said Mazen Issa, senior currency strategist at TD Securities in NY.
Cappelleri takes heart in the fact that the tight ranges has been part of a gradual grind higher. “The lack of momentum has been frustrating”, Cappelleri. The votes can signal whether a bank’s president favours a change in the main policy rate.
“With emerging markets, it s about the uncertainty over the Federal Reserve”.
Corporates: Shares of Express Inc.(EXPR) tumbled about 25% after the clothing and accessories retailer’s second-quarter results and third-quarter forecast fell short of expectations. Shares were off more than 4%.
La-Z-Boy dropped 14.6 percent after the company’s quarterly revenue and profit missed analysts’ estimates. The greenback lost 0.2 percent to 100.11 yen, and rose 0.1 percent to $1.1310 per euro.
There are a lot of risks to this trade, particularly oil price sentiment.
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Chinese stocks declined in Hong Kong yesterday, with the Hang Seng China Enterprises Index sliding 0.2 per cent, dragged down by energy producers after oil prices tumbled on global oversupply concerns.
