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- Global equity markets gained and the U.S. dollar rallied against major currencies on Wednesday for the first time this week as Federal Reserve officials continued to downplay prospects of rising inflation
- On Tuesday, vice chair Richard Clarida said the Fed could curb inflation and engineer a “soft landing” without throwing the economic recovery off track
- MSCI’s broadest index of world stocks rose 0.18 per cent to 708.52, while European stocks were flat below a record peak set on Tuesday
- The Dow Jones Industrial Average rose 0.03 per cent, to 34,323.05, the S&P 500 gained 0.19 per cent, to 4,195.99 and the Nasdaq Composite added 0.59 per cent, to 13,738.00
- Gold prices fell below $1900 per ounce, its appeal dimmed by a rebounding dollar and U.S. Treasury yields
Global equity markets gained and the U.S. dollar rallied against major currencies on Wednesday for the first time this week as Federal Reserve officials continued to downplay prospects of rising inflation.
MSCI’s broadest index of world stocks rose 0.18 per cent to 708.52. European stocks were flat below a record peak set on Tuesday.
Overnight in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.45 per cent to over two-week highs, while Tokyo’s Nikkei advanced 0.3 per cent.
Emerging market stocks strengthened as stronger economic growth numbers in Mexico lifted the peso, boosting hopes the country is on track to recover from its sharpest economic contraction since the 1930s.
MSCI’s index of emerging market stocks rose 0.48 per cent.
Fed vice chair for supervision Randal Quarles signalled the U.S. central bank’s plans to open talks on easing its bond buying program as the economy roars ahead and prices rise. On Tuesday, vice chair Richard Clarida said the Fed could curb inflation and engineer a “soft landing” without throwing the economic recovery off track.
On Monday, Fed Board Governor Lael Brainard and James Bullard, president of the St. Louis Fed, reiterated the dovish monetary policy stance.
The dollar index was up 0.392 per cent, while the benchmark yields on 10-year U.S. Treasuries slipped to 1.557 per cent, from 1.564 per cent late on Tuesday.
The comments from multiple Fed officials reflect a shifting tone at the central bank. A month ago, Fed Chair Jerome Powell said it was “not yet” time to contemplate discussion of policy tapering or slowing the pace of asset purchases.
More recently policymakers have acknowledged they are closer to debating when to scale back crisis support for the U.S. economy.
On Wall Street, all three main indexes closed higher driven by consumer discretionary, communication services and financial sectors ahead of the Memorial Day long weekend.
The Dow Jones Industrial Average rose 0.03 per cent, to 34,323.05, the S&P 500 gained 0.19 per cent, to 4,195.99 and the Nasdaq Composite added 0.59 per cent, to 13,738.00.
Gold prices fell below $1900 per ounce, its appeal dimmed by a rebounding dollar and U.S. Treasury yields.
Spot gold shed 0.17 per cent to $1896.06 per ounce after hitting its highest since Jan. 8 at $1912.50.
Oil prices settled higher as a drop in U.S. crude stockpiles reinforced expectations of improving demand ahead of the peak summer driving season, offsetting worries that a possible return of Iranian supply would cause a glut.
Brent settled up 16 cents, or 0.3 per cent, to $68.87 a barrel and U.S. West Texas Intermediate crude settled up 14 cents, or 0.2 per cent, at $66.21 a barrel.
