The Federal Reserve will likely raise interest rates two or three times this year, another top Fed official said on Monday (May 23), reinforcing the central bank’s message it is getting ready to act now that the U.S. economy has recovered from a weak winter. Shares in Alpha Bank, Eurobank Erasias, Caxiabank and Deutsche Bank rose between 1.8 percent and 4.4 percent. European shares climbed sharply overnight, also led by financial shares, with the pan-European stock index rising 2.3 percent to its highest since late April.
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The New Zealand dollar fell as traders continued to see the possibility of USA interest rates rising next month after Federal Reserve officials said the June meeting was still live for a move, stoking demand for the greenback. CPI rose 1.1% year-over-year (or YoY) in April from 0.9% in March.
Fed Hints at June Rate Hike: Why Is the Market Divided on Timing? Brent crude, used to price worldwide oils, rose 20 cents to $49.13 a barrel in London.
North American stocks opened higher on Tuesday, recouping some of Monday’s losses, with banks among the biggest gainers as investors speculated on the possibility of a June interest rate hike.
Dollar trends and the outlook for interest rates will continue to be the dominant influence on gold prices with wider trends in risk appetite also important.
The two-year Treasury yield rose 2 basis points to 0.922 percent, reaching its highest level in two months. However, the market did not take the good economic news as a positive development. Why? South Korea’s Kospi edged down 0.4 percent to 1,947.41.
Euro zone finance ministers agreed with Greece and the International Monetary Fund on Wednesday on a deal that will address Athens’ requests for debt relief, French Finance Minister Michel Sapin said.
The U.S. dollar gained against most other currencies thanks to the rate hike expectations.
The yield on two-year Treasury yield hit 0.905 per cent, within striking distance of the two-month peak of 0.920 per cent set last Thursday.
METALS: Precious and industrial metals futures closed mostly lower. In addition, weak iron ore and crude oil prices weighed on resources stocks.
The dollar strengthened 0.2 percent to 110.165 yen, up from this week’s low of 109.12 and within sight of its three-week high of 110.59 touched on Friday.
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Meanwhile, silver was down 0.6% at $16.31 an ounce, after earlier hitting a five-week low of $16.19, while platinum was down 0.3% at $1,005.20 per ounce, off a four-week low of $997.79. Spot gold was down 0.1 percent at $1,250.96 an ounce after falling earlier to $1,242.63 an ounce, the lowest since April 28. Brent crude futures gained 1.3 percent to $49.24 per barrel.
