“The German economy is continuing its uninterrupted upward trend in August”, Markit Economist Oliver Kolodseike said.
Advertisement
Eight of the 10 major S&P 500 indexes were higher, led by a 0.76 percent gain in the materials index .SPLRCM . Hawkish comments from some Fed officials last week seemed to conflict with the minutes of the most recent Fed meeting.
USA stocks traded lower on Wednesday while investors eagerly awaited a speech from Federal Reserve Chair Janet Yellen. In recent days, Fed Vice Chairman Stanley Fisher signaled that a 2016 rate hike is still under consideration, saying the US economy is close to meeting the central bank’s goals.
A gauge measuring the performance of the dollar traded close to a three-month low reached last week and left this year’s loss at 5.1 per cent, on track for the worst year since 2007.
Germany’s DAX closed up 0.9 percent, France’s CAC-40 rose 0.7 percent and the U.K.’s FTSE 100 rose 0.6 percent. The speech, written by governor Graeme Wheeler and delivered by assistant governor John McDermott, said a lower rate was needed to prevent weak low inflation expectations from bedding in, but to go faster would risk promoting instability in the financial system.
“I think people are reading way, way too much into Jackson Hole”, said Kay Van-Petersen, Asia macro strategist at Saxo Capital Markets.
At home, the Footsie gained 39.97 points to end the previous session 0.59 percent higher at 6,868.51, with higher copper prices propping up London-listed miners.
A survey of Japanese manufacturing activity for August showed output rose for the first time in six months, but the improvement was marginal and investors fixed their focus on the Fed instead. Investors will be listening to any clues from Yellen regarding the timing of the next interest rate hike.
“But in reality, the response has been very muted”. Analysts predict net income fell 2.3 percent in the second quarter, and that it will slide 0.9 percent in the current period. German Bund yields nudged up as well along with the rest of the euro zone and UK Gilts.
Southeast Asian stock markets trod cautiously on Wednesday as strong U.S. housing data released overnight increased the chances of an interest rate hike in the coming months, while oil prices slipped after a surprise jump in United States inventories. Concurrently, the West Texas Intermediate fell 2.85% or $1.37 to $46.93 per barrel. The local unit had hit a high of 67.10 and a low of 67.20.
A few Fed policymakers worry the US economy, which has delivered strong job gains but worryingly weak rates of inflation, could be stuck on a low growth path that requires low rates for years as well as new policy tools.
Advertisement
The greenback was little changed at 100.540 yen.
