Oil prices rose as much as 2 percent on Thursday, tracking a surge in gasoline futures and higher US equity markets that helped stem a two-day rout in crude futures.
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Asian stocks firmed yesterday after weak U.S. data reduced the already low chance of an interest rate increase by the Federal Reserve at next week’s meeting, sending the Treasury yield curve surging to its steepest level in 2½ months. The kiwi gained to 55.20 British pence from 54.81 pence after the Bank of England left its bank rate unchanged at 0.25 percent. The Australian dollar inched up 0.1 percent to $0.7520 after posting a 0.7 percent gain on Thursday.
South Korean, Chinese, Taiwanese and Hong Kong markets are closed for holidays.
“The weakness in retail sales and industrial production in August underline that the rebound in third-quarter GDP growth could be weaker than previously hoped, which is another reason for the Fed to pass on raising interest rates next week”, according to Capital Economics.
Last month that probability was 57.5%.
The gap (Frankfurt: 863533 – news) between five-year note yields and 30-year bond yields widened to 129.70 basis points, the steepest since June 27.
“The disappointing retail sales numbers really reinforces our view that it would be hard for the Fed to lift rates next week”, said Bill Merz, an investment strategist at U.S. Bank Wealth Management in Minneapolis. [O/R] The 10-year U.S. Treasury note yield stood at 1.697 percent after sliding overnight to as low as 1.682 percent.The 10-year yield fell as bond market weakness, which had sent it to a three-month high of 1.752 percent earlier this week, ebbed slightly.
Markets will be keeping a close eye on the U.S. Consumer Price Index (CPI) for August on Friday.
Wall Street also benefited from a 3.4 per cent jump in Apple shares, after the company said that the first batch of its new iPhone 7 Plus sold out globally.
September 16 (BusinessDesk) – The New Zealand dollar rose back above 73 U.S. cents on speculation the Reserve Bank will hold off on cutting interest rates next week while the Federal Reserve is seen as unlikely to hike USA rates, keeping the kiwi’s yield advantage intact.
Few Japanese companies believe the central bank’s aggressive monetary stimulus will achieve its goal of spurring inflation, a Reuters poll found, with firms citing negative fallout from the program more than positive effects.
The SNB warned that significant risks remain after sticking with its ultra-loose monetary policy and currency intervention, while the BOE said it is still likely to cut interest rates to just above zero this year. The dollar eased 0.1 percent to 102.02 yen.
The dollar index, which tracks the greenback against a basket of six major peers, remained steady.
The euro EUR=EBS was also flat for both Friday and the week at $1.124.
Oil prices edged up as short-covering stemmed a two-day rout, but a stronger dollar stemmed gains.
Brent crude LCOc1 slid 0.5 percent to $46.38 a barrel, extending losses for the week to 3.4 percent. United States crude retreated 0.6 per cent to $43.66, poised to end the week down 4.8 per cent.
Spot gold fell to a two-week low, trading down 0.7 percent to $1,313.31 an ounce.
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The New Zealand economy grew 0.9 percent in the second quarter, slower than the market’s expectation of 1.1 percent growth but faster than the central bank’s 0.8 percent forecast.
