USA shares slip on Fed rate hike worries; dollar climbs

Andrew Cummings
August 31, 2016

BlackRock states that low volatility and low trading volumes characterized the financial markets last week, running up to Yellen's remarks last Friday in Jackson Hole, Wy., with US equities recording their least volatile 30-day trading period in more than two decades.

The Conference Board is scheduled to release a report on USA consumer confidence for August at 10:00AM ET (14:00GMT).

With London markets closed on Monday for a public holiday, Tuesday marked the first full day of trading there since U.S. Federal Reserve Chair Janet Yellen and Vice Chair Stanley Fischer left the possibility of a near-term rise in U.S. rates on the table, boosting the dollar.

USA shares slip on Fed rate hike worries; dollar climbs

Investors were still awaiting more clues on whether the Fed will hike in September or December, including Friday's US August non-farm payrolls data. Some doubts as to whether the U.S. central bank will be able to move next month helped European shares gain.

"On the whole, the USA consumer has remained a robust proposition within an worldwide context of weakening demand, and the positive data may put the long-speculated interest rate hike further up Yellen's agenda", said Dennis de Jong, managing director of UFX.com.

Employers are expected on Friday to show 180,000 job gains in August, according to a Reuters poll, below the better-than-expected 255,000 additions in July and 292,000 gains in June. The dollar hovered at a 2 1/2-week high against other top currencies ahead of USA trading as the overarching theme of interest rate moves helped Europe's banking and industrial stocks push the FTSEurofirst 300 higher.


Swiss National Bank President Thomas Jordan has said that negative rates are "absolutely necessary" in his country.

The S&P 500 lost 4.51 points, or 0.

Oil prices fell for a second straight day in response to the dollar's strength, but the downside was limited by production suspensions in the US Gulf, due to an expected tropical storm.


Nasdaq 100 e-minis were down 8.5 points, or 0.18 percent, on volume of 18,989 contracts. U.S. crude was down 39c, or 0.83%, at $46.59 per barrel. Doubts remain about when USA monetary policy will change, especially with an election in November. Benchmark 10-year U.S. Treasury yields were last at 1.570 percent, from a yield of 1.566 percent late Monday. Oversupply remained a major concern with US crude stockpiles forecast to have risen by 1.3 million barrels last week, a Reuters poll showed.

"That is probably going to weigh on gold".

Shares of Apple fell 1 percent to $105.71, premarket, after European Union antitrust regulators ordered the iPhone maker to pay $14.5 billion to the Irish government, ruling that a scheme to route profits through Ireland was illegal state aid.


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