“The case for an increase in the federal funds rate has strengthened in recent months”, U.S. Fed Chair Janet Yellen said in Jackson Hole on Friday. Strong demand for the USA currency from the Japanese at month-end is also supporting the dollar, according to Saito, who expects the greenback could rise to as strong as 102.5 yen Tuesday. The dollar index, which tracks the greenback against a basket of six rivals, was up 0.2 percent at 95.785. US shares were set for a quiet open, with Dow and S&P 500 futures both unchanged.
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US stock index futures were little changed on Tuesday as investors waited for more clues on the timing of the next interest rate hike. Household spending in Japan jumped by 2.5% month-on-month in July, beating estimates of 1.1%.
The Nasdaq gained 13.41 (+0.26 percent) to close at 5,232.33, while the S&P 500 finished at 2,180.38, up 11.34 (+0.52 percent) from its open.
Investors are awaiting a report on monthly payrolls data due on Friday, which could support the Fed’s earlier plans for two hikes this year or scuttle any move.
Nearly a decade of ultra-low interest rates has helped propel stock prices to record highs.
Two close Yellen allies – William Dudley, president of the Federal Reserve Bank of NY, and Stanley Fischer, the Fed’s vice chairman – suggested in the past week that a strengthening economy would soon warrant a resumption of rate increases.
About 5.66 billion shares changed hands on USA exchanges, compared with the 5.98 billion daily average over the last 20 sessions.
MSCI’s all-country world equity index .miwd00000pus was last down 0.5 points, or 0.12 percent, at 417.92. South Korea’s Kospi added 0.8 percent to 2,047.93 in early trading.
Fischer again sounded unenthusiastic about using negative interest rates as a policy tool in the event of a recession, citing research that said pushing rates below zero works in the short-run but then becomes “counterproductive”. Crude oil prices rebound as the U.S. dollar backed off a two-week high hit the day before. Looking through the month-to-month volatility, the trend (12-month moving average) in payroll growth has decelerated from over 250,000 in early 2015 and 230,000 in early 2016 to around 200,000 now.
Elsewhere, Apple shares fell 0.5% after the European Union’s antitrust regulator demanded that Ireland recover roughly EUR13 billion in unpaid taxes from the company.
In commodity markets, oil steadied after falling by around 1 per cent on Monday. United States crude was down 80 cents, or 1.68 per cent, at US$46.84 per barrel.
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Safe-haven spot gold slid to a near five-week low of $1,314.70 on the dollar’s gains.
