TN: European Stocks Set of Record 4 Year Loss in August
On Monday, China’s main markets were mixed, with the Shanghai Composite down 0.8 percent, the Hang Seng up slightly and Japan’s Nikkei off more than 1.3 percent.
“A strong payrolls report might be required for the Fed to pull the trigger in September but even if tightening is delayed a few months it will not be positive for EM FX”, analysts for Societe Generale said in a note.
However, gold prices gained about 3.4 percent for the month.
That sent Asian stocks reeling on Tuesday, stretching overnight losses that followed weekend comments from a key Federal Reserve official suggesting a rate increase in September is likely. The Nasdaq composite declined 16 points, or 0.3 percent, to 4,812. Many believe that the housing market is once again driving the growth in the US economy as the stock markets have stumbled.
The most active gold contract for December delivery lost $1.5 (0.13 percent) to settle at $1,132.50 per ounce.
The pan-European FTSEurofirst 300 index eased 0.5pc, putting it on track also for its worst month since August 2011.
Spot palladium fell 0.8 per cent to $594.05 an ounce and platinum eased 0.1 per cent to $1,005.50. The CSI300 index.CSI300 ended up 0.7 percent, after falling 4 percent at one point.
Speaking to delegates at the Kansas City Federal Reserve’s annual retreat in Jackson Hole, Wyoming, Fed Vice-Chairman Stanley Fischer, however, hinted that the US central bank has not totally abandoned a rate hike, saying that inflation will likely rebound given downward pressure from the strengthening dollar, declining oil prices and improving labor market.
Shares on Wall Road opened decrease Monday, following markets throughout the globe, as buyers continued to grapple with questions on China’s financial system and new uncertainty from the Federal Reserve.
However, prices fell back by 2% on Tuesday to $53 per barrel.
The euro rose to US$1.1236 and 136.01 yen from US$1.1188 and 135.97 yen in US trade.
Also on Monday, the Energy Information Administration adjusted its measure of crude oil production in the country, trimming its forecast by up to 130,000 barrels a day for the first five months of the year as it switches to a new survey, the agency said on its website.
“Unless we see a decisive trend forward in the trajectory of US interest rates, investors will continue to be wary of emerging market assets”.
Gold held mostly steady on Monday as investors sharpened their focus on U.S. data and the Fed.
“We are seeing some general risk-off moves in the Asian timezone and some buying of gold would be consistent with that, ” Ric Spooner, chief market analyst at CMC Markets in Sydney. Benchmark 10-year Treasuries US10YT=RR were last up 3/32 in price to yield 2.17 percent, from a yield of 2.18 percent late Friday.
