New York Fed President William Dudley said a rate hike in September was possible, while Atlanta Fed President Dennis Lockhart said the US economy was likely strong enough for at least one rate increase before the end of 2016, with two a possibility.
Advertisement
Excluding energy services, there was an annual increase of 3.1% in services-sector prices over the year with medical services rising 4.1% over the year after a 0.5% monthly increase and there will still be concerns over underlying rising inflationary pressures within the services sector.
The Brazilian real, however, weakened 0.17 percent to close at 3.1940 per dollar as traders reacted to Dudley’s comments by expanding bets on policy tightening this year, with a slightly better-than-even chance of a December move.
MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.3 percent, while Japan’s Nikkei rallied by about 0.5 percent, cutting significant losses on Tuesday.
The bourse was weighed down by a 5.56 percent fall in shares of steelmaker Cia Siderurgica Nacional SA, which Reuters reported will announce the sale of a tinplate can producing unit.
The dollar nudged up 0.2 percent to 100.485 yen after falling to 99.550 overnight, its lowest since June 24, when post-Brexit referendum turmoil had boosted the safe-haven yen. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.19 percent to 962.23 tonnes on Tuesday.
The euro rose to as high as $1.1323 on Tuesday and last fetched $1.1275, maintaining its 0.9 percent gains the previous day.
The dollar index, which measures the greenback against a basket of six major currencies, also fell more than 1 percent to its lowest in more than seven weeks at 94.426.
Data showing USA consumer prices were unchanged in July, marking the weakest reading since February, also reinforced skepticism that the Fed would hike rates by December. However, interest rates rose on Tuesday (as bond prices fell), with the yield on the 10 Year U.S. Treasury higher by 1.48 percent. The stock tumbled $14.05, or 26.3 percent, to $39.35.
Silver fell 1.04 percent to $19.59 an ounce on Wednesday. Overall industrial production, which includes utilities and mining, grew 0.7 percent as people used more air conditioning in response to hot weather. Benchmark U.S. crude added 84 cents, or 1.8 percent, to $46.58 per barrel in NY. Still, factory output is just 0.2 percent higher than it was a year ago and manufacturers aren’t adding many jobs. Brent crude, a benchmark used to price worldwide oils, rose 88 cents, or 1.8 percent, to $49.23 a barrel in London. Its stock jumped $4.35, or 7.9 percent, to $59.25.
Advertisement
Mainland Chinese markets had mixed results amid session as the Shanghai composite had seen a 0.34 percent drop, while the Shenzhen composite remained steady at 2,038.32. Japan’s Nikkei 225 fell 1.6 percent as the yen gained against the US dollar.
