A softer greenback tends to favor non-U.S. buyers of dollar-denominated commodities like oil. The U.S. central bank has yet to raise the federal funds rate this year. The document indicated that “some” of those at the meeting “judged that another increase in the federal funds rate was or would soon be warranted, with a couple of them advocating an increase at this meeting”.
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“These notes really show they’re giving the same amount of ammunition to the hawks and the doves”, Pennsylvania-based Penn Mutual Asset Management chief investment officer Mark Heppenstall says. His firm oversees about $20 billion.
The minutes from the Fed’s July meeting, published on Wednesday, show some Fed leaders see an opportunity for a rate hike this year.
Some members of the Federal Reserve have expressed intentions that they wanted to raise rates in July or in September, but among the voting members, only Esther George voted for a hike.
The Fed’s deliberations come amid growing debate about how well low interest rates can really meet today’s economic challenges, a discussion prompted partly by the presidential election.
“The minutes contained more concrete indications that a consensus to raise rates is slowly building”, said Brian Dolan, head market strategist at Drivewealth in New Jersey.
Benchmark 10-year note yields fell three basis points, or 0.03 percentage point, to 1.55 per cent as of 5 p.m.in NY, according to Bloomberg Bond Trader data.
New York Fed President William Dudley said Tuesday during an interview on Fox Business Network that “the market is complacent” about the amount of tightening that will be needed over the next year or so.
Analysts said the FOMC minutes have had the biggest impact on the dollar, compared with recent Fed policymakers’ comments.
July’s unchanged reading in the Consumer Price Index followed two straight monthly increases of 0.2 per cent, while in the 12 months through July, the CPI rose 0.8 per cent after increasing 1.0 per cent in June.
In currency markets, the dollar was down 0.2 percent at 100 03 yen, near a post-Brexit low of 99.55 hit on Tuesday. At the news, most stock markets, including Korea’s, crashed. Copper futures for December delivery declined 0.8 percent to $2.1635 a pound. Equities rebounded as utilities, health-care and financial stocks shook off earlier declines. The stock fell $4.41, or 5.8 percent, to $71.07.
HOW LOWE CAN IT GO: Home improvement retailer Lowe’s cut its annual profit forecast after it reported mixed quarterly results including lower-than-expected earnings and weak sales at older stores.
Sagoo notes that the TSX gained 30 points in reaction and that US indices were also higher.
USA stocks are trading lower Wednesday as the market inches away from its recent record highs. Saudi Arabian shares dropped the most in nearly three months.
USA crude rose 0.1 percent to $46.85 a barrel, with their surge slowing after a Reuters report that suggested Saudi Arabia was cranking its crude output to new record highs, even as OPEC talked of ways to ease a global glut. Analysts expected earnings of about 56 cents a share on $886.8 mln in revenue, according to a consensus estimate from Thomson Reuters.
Some energy stocks were up, while the oil price held gains from earlier in the week on a USA inventories report showing significant declines in stockpiles of both crude and gasoline. A Bloomberg survey ahead of the data had forecast an inventory build of 950,000 barrels.
The euro edged up 0.2 percent to $1.13060 with the common currency on track to rise more than 1 percent this week. Refineries used 268,000 barrels a day more crude than a week earlier.
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With assistance from Emma O’Brien, Narayanan Somasundaram, Choong En Han, Kevin Buckland, Jonathan Burgos, Stephen Kirkland, David Goodman, Alan Soughley, Camila Russo, James Herron, James Regan, Lananh Nguyen, Michael Yang, Eliza Ronalds-Hannon, Rachel Adams-Heard, Jessica Summers, Kelly Gilblom, Justin Villamil, Mark Shenk and Oliver Renick.
