THE QUOTE: In the last two weeks, a few Fed leaders gave different opinions on whether the central bank should raise interest rates now. Energy companies are rising with the price of oil.
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Richard Franulovich, an analyst at Westpac, noted that back in June the median “dot plot” – the rate moves expected by the Fed’s members – showed five hikes to end-2017.
BANK OF JAPAN: Japan’s central bank made some technical changes that give it more influence over long-term interest rates.
The Fed also said in the statement that near-term risks to the U.S. economic outlook “appear roughly balanced”, a further sign that the central bank could raise rates by the end of this year.
‘Yellen is much more anxious about the risk of hiking early rather than hiking too late, ‘ he said. On Wednesday, the CAC 40 climbed 0.8 percent, the DAX gained 0.7 percent and the FTSE rose 0.2 percent.
Dr Lowe said there is a chance the cash rate could be cut to a new all-time low of 1.25 per cent, but that would depend on factors including inflation, the labour market, house prices and the global economy.
Benchmark U.S. crude added $1.29, or 2.9 percent, to $45.34 a barrel in NY.
Harris at Renaissance Capital explained that the Fed has handicapped itself by not hiking rates earlier in the year. The yen has gained roughly 20% against the dollar since the start of the year.
At the local market, all counters, except for the mining/oil counter, surged led by the holding firm and services counters which were both up by over 1 percent.
Also, the Turkish lira largely benefited from the Fed and BoJ decisions as the US dollar versus Turkish lira rate, which was at 2.9768 the previous day at market close of markets at 5:30 p.m. local time (2:30 GMT), tumbled to 2.9530 at opening of markets at 9:30 a.m. (6:30 GMT), or down 0.8 percent.
The probability of a November hike stands at a modest 12.4 percent, and rises to 58.4 percent for December, according to the CME Group’s FedWatch tool.
The dollar fell to its lowest level in 10 days against a basket of major currencies on Thursday, a day after the Federal Reserve cut its longer-term interest rate expectations.
The Standard & Poor’s 500 index rose 15 points, or 0.7 percent, to 2,178. The yield on the U.S. Treasury 10-year note fell to 1.61 percent from 1.67 percent the day before. Japanese markets were closed for a holiday.
Winer said he remains concerned how much more stocks can increase in the short-term, with the US presidential election coming and third-quarter company earnings reports around the corner.
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The European oil and gas index was up 1.2 per cent, helped by a 1.3 to 1.5 per cent rise in BP, Royal Dutch Shell and Tullow Oil.
