High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/4b1c3d6c-68df-11e6-a0b1-d87a9fea034f.html#ixzz4I9fyJX8e
chair Janet Yellen is to give a much-anticipated speech on Friday, offering comments which investors hope will provide a bit more clarity to the likely trajectory of borrowing costs in the world’s biggest economy.
But caution ahead of that “risk event” combined with end of August holiday-thinned dealing rooms, and a lack of other fresh catalysts, are making for some muddled markets.
After Asian trading saw Tokyo and Shanghai bourses go in opposite directions, US futures suggest the S&P 500 will add 6 points to 2,188.6, leaving the Wall Street equity benchmark less than 2 points off its record close.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/4b1c3d6c-68df-11e6-a0b1-d87a9fea034f.html#ixzz4I9fzGtRg
In Europe, the Stoxx 600 index is up 0.8 per cent as miners and banks lead the gainers. The continent’s oil majors are underperforming as Brent crude follows up Monday’s 3.4 per cent drop with another 0.9 per cent fall to $48.73 per barrel.
Brent last week rose above $50 for the first time since early July on hopes that Opec could agree a production curb, but investors have become more sceptical about the oil cartel’s ability to secure any such deal.
Also weighing on oil prices in recent sessions was a stronger dollar, which had been rallying in response to more hawkish “Fedspeak”.
Stanley Fischer, the vice-chairman of the Federal Reserve’s Board of Governors, over the weekend delivered an upbeat assessment of the US economy — chatter that encouraged traders to price in a slightly greater chance of an interest rate rise in coming months.
Investors will now be keen to see if Janet Yellen helps cements those expectations when she delivers a talk on Friday at the central bankers’ gathering in Jackson
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/4b1c3d6c-68df-11e6-a0b1-d87a9fea034f.html#ixzz4I9g0DCjz
Still, the greenback is a touch softer on Tuesday and Treasury yields a bit firmer, suggesting the market remains uncertain about where to place its monetary policy bets.
“As much as Fed commentary has been on the hawkish side, Fed speakers have refrained from expressing specific timing on the next hike,” said Rodrigo Catril, a currency strategist at National Australia Bank. “So although Fed speakers appear to be upbeat on the outlook for the US economy, the vague timeframe for the next hike also reflects a degree of uncertainty. Ultimately, it will all be about the data.”
The 10-year Treasury yield, which moves inversely to the bond price, is up 2 basis points to 1.56 per cent, while equivalent maturity Bunds offer minus 0.08 per cent, up 1bp on the day after eurozone business output hit a seven-month high.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/4b1c3d6c-68df-11e6-a0b1-d87a9fea034f.html#ixzz4I9g1jvyS
The dollar index, which measures the buck against a basket of its peers, is dipping 0.2 per cent to 94.35 as the euro and pound gain roughly 0.2 per cent and 0.3 per cent, respectively.
Dealers are keeping an eye on the dollar/yen exchange rate, which is down 0.2 per cent to ¥100.10 as the Japanese currency strengthens following data showing the pace of contraction in the country’s manufacturing sector slowed in August. The PMI reading of 49.6 was above July’s 49.3, but still below the threshold of 50 that separates expansion from contraction.
Nevertheless, “the third straight rise in the manufacturing PMI suggests that the sector is coping quite well with the sharp strengthening of the exchange rate since the start of the year”, said Marcel Thieliant at Capital Economics.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/4b1c3d6c-68df-11e6-a0b1-d87a9fea034f.html#ixzz4I9g49r1a
The exporter-sensitive Japanese stock markets tend not to like a firmer yen, and so the Nikkei 225 fell 0.6 per cent in a mixed regional performance.
Australia’s S&P/ASX 200 was chipper, adding 0.7 per cent in response to some well-received company results. New Zealand’s S&P/NZX 50 inched up 0.1 per cent to a new record even as the kiwi dollar added 0.3 per cent in response to less dovish than expected comments from the central bank.
In Hong Kong the Hang Seng was flat while on the Chinese mainland the Shanghai Composite was up 0.2 per cent and the Shenzhen Composite gained 0.3 per cent.
