“The Treasury market is taking no direction [from] the data and in fact has bounced this morning following Friday’s sharp selloff”, said Ian Lyngen, an independent interest-rate strategist, in an email. “It wasn’t until [Fed vice-chairman] Stanley Fischer noted Yellen’s comments were consistent with two more interest rate hikes this year that markets really took notice and the USA dollar took a leg higher”. A Wall Street Journal report earlier Friday said that the investment bank Jefferies had been looking for buyers for Icahn’s position.
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The chances of a rate hike in September jumped to 30 per cent from 21 per cent, according to CME Group’s FedWatch tool.
Markets do not appear to be pricing in a rate increase despite upbeat U.S.jobs reports that bolster the case for a hike and hawkish statements from policymakers, Tannenbaum said Monday on CNBC’s “Squawk Box.” .
Europe’s STOXX 600 Oil & Gas index fell 0.6 percent, one of the biggest sectoral decliners, weighed down by falls in crude oil prices.
Gold extended its longest losing run since May to a 7th day, falling as much as 0.5 per cent after losing 1.5 per cent last week. The euro rose to $1.1187 from $1.1183.
US shares rose slightly Monday with investors’ mood buoyed by hints from the US Federal Reserve of an interest rate hike because of strong growth. The S&P 500 slipped 3.43 points, or 0.2 per cent, to 2,169.04.
The Dow Jones industrial average .DJI was last up 120.01 points, or 0.65 percent, at 18,515.41.
The US dollar index, which tracks the greenback against a basket of six rivals, was steady yesterday at 95.551, not far from Friday’s high of 95.594, its highest level since August 16. Traders said a strong number could see the dollar break out of its recent ranges. Utilities and phone companies, whose business would suffer if there is a rise in the interest rates, dipped the most.
In the SNL/S&P report, profits for the quarter reached $43.6 billion, compared to the $43.01 billion in Q2 of 2015, a gain of 1.4 percent.
United States futures slightly traded in negative territory (minus 0.03%) before the personal income and personal spending data release at 1230 GMT.
West Texas Intermediate slid 1.7 percent to $46.85 and Brent shed 1.4 percent to $49.21.
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Russia, which is not an OPEC member, is due to join next month’s informal meeting in Algeria at which participants are expected to discuss production. Other Fed officials including her deputy, Fed Vice Chairman Stanley Fisher, also advocated a rate hike in the near term. Senior officials at Shell and ConocoPhillips told an industry conference in Norway the oversupply could extend into 2017.
