With that said, El-Erian argued that the upcoming employment data could heavily influence if the Federal Reserve initiates a new interest rate hike.
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The dollar rose to a three-week high against the yen on Monday, while bond yields surged to their highest since June and stocks sold off after senior Federal Reserve officials indicated a US interest rate increase was on the cards in the near term.
“I’m not surprised [Yellen] attempted to sound a little more hawkish, ‘ Ian Winer, head of equity trading at Wedbush Securities, based in Los Angeles, told TheStreet TV”.
Some analysts said that uncertainty over whether the Fed will actually raise interest rates soon is likely to persist, even after the comments by Yellen and Fischer.
The move by the local exporters helped the Taiwan dollar recoup some of its early loses and partly resist the impact of the concerns over a possible rate hike by the Fed, dealers said. Treasuries maintained their price gains after US consumption and personal income data matched economists’ expectations for July. Though she expressed that US exports have been hurt by the strong dollar, she did describe consumer spending as “solid”.
Dai-ichi Life Insurance jumped 6.3 per cent, Sompo Japan Nipponkoa Holdings rose 5.1 per cent and Japan Post Insurance advanced 2.2 per cent.
The implied probability of a September rate hike rose to 42% from 32% just one day ago, and the chance of a December rate hike is now standing at 65% – the highest level in three months.
It bought 102.11 yen, up from 101.77 yen in U.S. trade and well up from the 100.45 yen in Asia earlier Friday, while the euro was down more than a USA cent at US$1.1190.
KEEPING SCORE: France’s CAC 40 lost 0.9 percent to 4,401, while Germany’s DAX fell 0.7 percent to 10,513. Shares of the auto giant were last down 1.1%.
Europe’s broad FTSEurofirst 300 index was last down 0.19 percent, at 1,350.13. Fisher had already mentioned that the Fed’s preferred price benchmark minus food and energy cost is at 1.6%, which is “within hailing distance of 2 percent”. The euro edged down 0.1 percent to $1.1191. Gold miners Newcrest Mining, Norther Star Resources and Evolution Mining slumped 3-11 percent as gold prices dipped on a firmer dollar. USA 30-year Treasury bond US30YT=RR yields also fell, with their prices rising more than a full point.
The MSCI Emerging Markets Index fell 0.7 percent to 894.79, after touching its lowest level since August 8. The S&P 500 was up 10.4 points, or 0.48 percent, at 2,179.44.
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Iran also said late last week that it would only cooperate in upcoming producer talks in September if other exporters recognized Tehran’s right to regain market share lost during global sanctions that were only lifted in January.
