“Markets had been half-expecting some hawkish noises around a possible September rate hike but it looks like the Fed chair is playing it cautious”, said Neil Wilson, markets analyst at ETX Capital.
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“The probability of a hike at the September meeting has gone up and will go up more after Yellen speaks”, Sohn said. “I do think it is time to move that rate”, Kansas City Fed President and voting member, Esther George, told CNBC, while Dallas Fed President Robert Kaplan said the central bank was “moving toward being able to take another step”.
Stocks are down around the world this morning, and market commentators say it is because investors are waiting to hear what Fed Chief Janet Yellen will have to say at the central bank’s annual conference in Jackson Hole.
Ahead of the speech, the Dow was up about 50 points, while the S&P and the Nasdaq were up more than 0.2 percent.
“ANALYST TAKE: “(Yellen’s speech) is the big event that the markets anticipated, and it has the potential to create waves within the calmness that has prevailed throughout this month”, said Margaret Yang, market analyst as CMC Markets Singapore.
The Chair of the Federal Reserve signaled that a rate hike this year is still on the table. She mentioned raising the Fed’s 2 percent inflation target to give it more leeway or possibly expanding the types of assets the Fed could buy beyond Treasurys and mortgage-backed securities. The S&P 500 Financial Sector Index recently broke above the down trend line that has defined the 2015-2016 correction phase. The yield on the 10-year note, which moves in the opposite direction of the price, rose to 1.59 percent from 1.54 earlier Friday. Freeport McMoRan, a copper miner, rose almost 3 percent. China’s Shanghai Composite was up 0.4 percent at 3,080.15.
October natural gas was up five cents at US$2.89 per mmBTU, while the December gold contract fell $5.10 to US$1,324.60 an ounce. It gained 1.2 percent in the last session as Saudi Arabia’s energy minister said an output freeze would be positive for the market and Iran confirmed its attendance at an informal meeting of the Organization of Petroleum Exporting Countries in Algiers next month. Signet Jewelers dropped $12.39, or almost 13 percent, to $83.11 after its results also missed estimates.
In oil markets, Brent crude traded at around $49.29 a barrel on Friday morning, down 0.77 percent, while US crude was around $47.14 a barrel, down 0.40 percent.
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But after sharp swings, the USA dollar was flat against the euro at $1.1286 and slightly lower against the yen at 100.28 yen.
