Several Fed officials spoke out last week about when the US central bank could raise interest rates, while Fed Vice-Chairman Stanley Fischer said Sunday that the USA central bank was close to hitting its targets for 2 percent inflation and full employment.
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Most of the S&P 500’s ten main sectors finished mixed to lower. The benchmark S&P/NZX index rose 5.17 points or 0.07 percent to 7,467.33.
European stocks fell 0.11 percent, having received a temporary boost in early trading by Syngenta after its proposed takeover by ChemChina was approved by us regulators.
The Medivation deal pushed other biotechnology stocks higher as well. More flash surveys are due from Europe and the United States later in the day.
USA stocks were little changed in volatile trading Monday, as jittery investors remained on the sidelines ahead of a speech by Federal Reserve Chair Janet Yellen later this week. Investors still doubt the stars will align for a hike anytime soon, so a hawkish tone from Yellen would challenge that equanimity.
ANALYST’S TAKE: “Recent market price action suggests that nervousness about Fed policy may persist ahead of the Jackson Hole symposium”, Citigroup economists said in a report.
“But in reality, the response has been very muted”.
U.S 10-years have backed up +4bps to touch+1.60% while shorter-dated yields have touched levels not seen since the U.K’s June 23 Brexit vote. But the markets seem to be already discounting the possibility that Yellen may look to talk up a September rate hike. Oil & gas producer Oil Search shed 0.8 percent on reporting an 89 percent fall in first-half profit.
Because of the production and storage overhang in fuel markets, Barclays said this month’s 20% price rally is unwarranted and that oil prices of $50 or higher are unsustainable. Brent crude, used to price global oils, tumbled $.158 to $49.30 per barrel in London.
The dollar strengthened and U.S. Treasury yields hit a two-week high on Monday on expectations the Federal Reserve will give a signal this week that it is gearing up to raise interest rates. US West Texas Intermediate (WTI) crude futures fell $1.59 or 3.3% to $46.93 a barrel on the New York Mercantile Exchange.
Shares of Medivation jumped, up 19.7 percent as of 2.49pm in NY after Pfizer won a takeover battle for the maker of cancer drug Xtandi, with a deal worth about US$14 billion. The index has plunged over 2.15 percent over the previous month and has dropped by over 4.3% since the beginning of the year. Energy stocks declined more almost 1%, while most sectors finished mixed to lower after a volatile session.
The curve flattened as the spread between the 2-year and 10-year yields narrowed by 2.4 basis points to 48.1 basis points, indicating outperformance for longer-dated maturities.
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“Investors were relieved to see that the dollar stayed above ¥100.50 for most of Tokyo trading hours”, after the USA currency slid below ¥100 last week, said Hideyuki Suzuki, head of investment market research department at SBI Securities Co.
