Minutes may show why Fed kept timing vague on next rate hike U.S. stocks trade near record; Treasuries little changed Share on Facebook Share on Twitter The dollar climbed against most of its major counterparts, while gold declined, as investors awaited minutes from the Federal Reserve’s latest meeting to better assess the outlook for interest rates. U.S. stocks traded near a record. The Bloomberg Dollar Spot Index halted a three-day slide as the odds for higher borrowing costs by December climbed beyond 50 percent for the first time since June 23, when the U.K. voted to leave the European Union. Bonds fluctuated after two regional Fed chiefs indicated Tuesday that interest rates could be increased at least once this year. The S&P 500 Index was little changed, while gold and oil retreated. Global equities rallied to a one-year high earlier this month as the dollar index sank to levels last seen in May on speculation that uneven growth in the world’s largest economy would put a lid on rate hikes. Still, minutes of the July meeting could help explain why Fed officials stood pat without signaling the timing of their next move. New York Fed President William Dudley and Atlanta Fed chief Dennis Lockhart jolted markets Tuesday by indicating policy makers might lift borrowing costs as soon as next month. “People are obviously going to look at these minutes, especially with Dudley speaking yesterday -- that spooked the market a little bit,� said Patrick Spencer, London-based vice chairman of equities at Robert W. Baird, which manages $151 billion. “Prior to that, everybody assumed we would be lower for longer on interest rates. People should use it as a buying opportunity, given the outlook for growth in the U.S. I think it’s highly unlikely, ahead of the election, for them to raise rates in September.� St. Louis Fed chief James Bullard is due to speak Wednesday and the minutes of the U.S. central bank’s last policy meeting are scheduled for release at 2 p.m. in Washington. Tyco International Plc and Johnson Controls Inc. have shareholder meetings lined up to vote on their proposed $16 billion merger, while Cisco Systems Inc. is among U.S. companies reporting results. Currencies The Bloomberg Dollar Spot Index rose 0.3 percent at 9:30 a.m. in New York, after sliding 1 percent over the past three days. “While Dudley was at least able to stem the bleeding for the dollar index, price action is not encouraging for the dollar near term,� said Sean Callow, a senior foreign-exchange strategist at Westpac Banking Corp. in Sydney. “Still, so long as a rate hike seems more likely than not as the Fed’s next move, we wouldn’t get super bearish on the dollar.� The yen was down 0.4 percent at 100.68 per dollar, after strengthening beyond 100 on Tuesday for only the second time this year. The currency is still up 16 percent for the year and Japanese Vice Finance Minister Masatsugu Asakawa said policy makers are prepared to intervene if exchange-rate moves are extreme. The MSCI Emerging Markets Currency Index lost 0.6 percent, headed for the biggest drop in seven weeks on a closing basis. Bonds Following Dudley’s comments, Fed funds futures implied 51 percent odds for a rate increase by year-end, compared with 42 percent at the end of last week, according to Bloomberg calculations. The yield on Treasuries due in a decade was little changed at 1.58 percent, after climbing six basis points over the previous two days. A JPMorgan Chase & Co. survey showed Treasury investors held the most net long positions since June 20 in the week ended August 15. “Benchmark 10-year yields around 1.5 percent show the market isn’t concerned about higher rates, and Dudley doesn’t want that situation,� said Kazuaki Oh’E, the head of fixed income at CIBC World Markets Japan Inc. in Tokyo. “The Fed wants to prepare the market for the next hike.� Germany’s 10-year bond yield declined one basis point to minus 0.04 percent, while the U.K.’s was at 0.58 percent. Portuguese bonds tumbled for a second day on speculation that ratings company DBRS Ltd. may downgrade the nation’s sovereign debt. The 10-year yield climbed 10 basis points to 2.91 percent. Stocks The S&P 500 was little changed, trading near an all-time high. The Stoxx Europe 600 Index slipped 0.5 percent as miners slumped with commodities. ASML Holding NV sank after Intel Corp. said it won’t use the semiconductor-equipment maker’s lithography technology to make some of its chips. Carlsberg A/S slid 5.3 percent after the Danish brewer reported first-half profit that missed analysts’ estimates as the weakness of Russia’s ruble eroded earnings. Emerging-market stocks fell for a second day as renewed prospects for a U.S. interest-rate hike this year sapped risk appetite. Saudi Arabian shares dropped the most in almost three months. Egypt’s benchmark index slid as Commercial International Bank, which accounts for 40 percent of the gauge by weight, tumbled. Commodities Oil halted its advance after the biggest four-day gain since April as weekly industry data showed U.S. gasoline stockpiles expanded, keeping supplies at the highest seasonal level in more than two decades. West Texas Intermediate crude was at $46.41 a barrel, ending a 12 percent rally over the preceding four days after Saudi Arabia said it is prepared to act to stabilize markets. Another failed OPEC meeting would “cause more damage than good,� Qatar’s former energy minister Abdullah Bin Hamad Al Attiyah said in a phone interview. OPEC and non-OPEC nations need to do something, he said. Gold’s two-day gain stalled on the Fed rates speculation. Bullion for immediate delivery slipped 0.2 percent to $1,343.30 an ounce. Silver also fell.

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