Economy

Bond yields creep higher as markets wait for Fed signals

Bond yields creep higher as markets wait for Fed signals

"A rate cut in July is now all but certain", said James McCann, senior global economist at Aberdeen Standard Investments. With both equities and bonds sitting on outsize gains since the start of the year, it's unclear what further impetus they can get, given that traders are already discounting a cycle of interest-rate cuts.

Overall growth has also "moderated", the Fed chief said, while "there is a risk that weak inflation will be even more persistent than we now anticipate", and not prove as transitory as Fed officials have often insisted. The pound weakened as economists predicted the United Kingdom economy likely shrank for the first time since 2012 in the second quarter.

(MENAFN - Baystreet.ca) Stocks in Asia mostly edged up on Wednesday as investors awaited comments from U.S. Federal Reserve Chairman Jerome Powell for possible clues on the central bank's next move on interest rates.

Fed minutes are due on Wednesday, ECB minutes on Thursday.

Hong Kong's Hang Seng index rose 0.32%.

MSCI's broadest index of world stocks was trying to shake off three days of modest losses, though a muted morning for Europe and lower Wall Street futures markets underscored the pre-event caution.

Powell testifies before Congress on monetary policy and the state of the USA economy on Wednesday (the House of Representatives) and Thursday (the Senate).Fed minutes are due on Wednesday, ECB minutes on Thursday.A key measure of US inflation - the core consumer price index, due Thursday - is expected to have increased 0.2% in June from the prior month, while the broader CPI is forecast to remain unchanged.USA producer prices are due on Friday.

US producer prices are due on Friday.

The Dow Jones Industrial Average .DJI rose 76.71 points, or 0.29%, to 26,860.2, the S&P 500 .SPX gained 13.44 points, or 0.45%, to 2,993.07 and the Nasdaq Composite .IXIC added 60.80 points, or 0.75%, to 8,202.53.

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Barring any significant developments on the US-China Trade War front, the dollar index may hold within its 95.80-98.30 range for the near term while traders wait for more clarity on Fed policy through the rest of the year.

The Stoxx Europe 600 Index sank 0.5% to the lowest in more than a week. Australia's S&P/ASX 200 advanced 0.45%.

The euro increased 0.4% to US$1.1249, the biggest climb in more than two weeks.

Renewed strength in the dollar would be an extra worry for the British pound, which is stuck near a six-month low due to uncertainty over how Britain will avoid a messy no-deal exit from the European Union.

The greenback modified arms at 108.75 yen, having risen as much as 108.81 yen within the earlier session, its highest in additional than a month.

Sterling was last quoted at $1.2455 after skidding to a new six-month low of $1.2439 on Tuesday, with Brexit jitters and growing expectations of a Bank of England rate cut adding to the currency's weakness.

Gold futures rose 0.86% to US$1,412.20 an ounce.

Brent crude futures LCOc1 settled up $2.85, or 4.44%, to $67.01 a barrel, while U.S. West Texas Intermediate crude futures CLc1 settled up $2.60, or 4.5%, to $60.43 a barrel.

Iron ore decreased 1.5% to US$114.94 per metric ton.