Investors, however, will be looking to Yellen’s Friday speech at the annual Kansas City Fed symposium in Jackson Hole, Wyo., for more discernible clues to the next monetary-policy move.
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On Sunday, Fed Vice Chairman Stanley Fischer gave a generally upbeat assessment of the USA economy’s current strength in prepared remarks, saying the job market was close to full strength and still improving. Benchmark 10-year Treasury notes were down 15/32 price for a yield of 1.585 percent, up 5 basis points from late on Thursday, while the 30-year bond was 29/32 lower to yield 2.301 percent, up 4 basis points.
New York Fed President William Dudley, a close ally of Yellen’s, was among those sounding a more confident note in recent days on a possible near-term rate hike, citing broad progress in the US economy.
Automakers BMW, Daimler, Volkswagen, Renault and Peugeot dropped 1-2 percent as the dollar hovered near an eight-week low against the euro.
USA crude fell 0.9 percent to $48.09 after gaining 9 percent last week, rising for a second straight week.
A recent batch of strong USA employment readings have yielded upbeat views from some Fed policymakers suggesting rates could rise as soon as September, though mixed messages from the bank’s latest meeting have clouded the outlook.
Some economists predict that a rate rise could come as soon…
There were still widespread doubts that the Fed could raise rates in its September meeting despite two central bank officials pointedly reminding of the possibility over the past week. “We believe she may use the opportunity to signal the Federal Open Market Committee’s growing confidence in the outlook for activity and inflation”, wrote strategists at Barclays.
“Given the low market expectations for a September or December Fed rate hike, a repricing at the front end of the rates curve should drive a near-term rebound in the United States dollars”.
We expect Yellen to deliver a stronger signal about the likelihood of a near-term rate hike and retain our view that the next increase will occur in September.
The pound was down 0.1 percent at $1.3058 GBP=D4 after being knocked away from a 2-week high of $1.3186 on Friday. The New Zealand dollar shed 0.6 percent to $0.7228 NZD=D4 .
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Sterling was on the defensive after dropping 1 percent against the dollar on Friday on speculation that Britain could formally begin the process of leaving the European Union early next year.
