NEW YORK: Global stock markets were little changed and the U.S. dollar gained on Monday as investors weighed the possibility that U.S. interest rates could soon be raised.
Commodities were weak across the board. Oil prices fell and were on track for a fourth session of losses as investors worried about global supply, and copper prices fell towards the three-month lows hit last week.
In the United States, an imminent rise in interest rates was looking more likely. The Federal Reserve will likely tighten policy a bit quicker in 2017 than this year, by perhaps one or two more interest rate hikes, San Francisco Fed President John Williams said on Monday.
St. Louis Fed President James Bullard said on Monday a relatively tight labor market in the United States may put upward pressure on inflation, raising the case for higher interest rates.
The Fed surprised investors when the central bank’s meeting minutes released last week opened the door to a rate hike as early as in June, roiling financial markets.
Topping the agenda this week is whether U.S. data adds to the likelihood of a June or July rate increase.
“Focus remains on the Fed’s next move and as you take a look at all the economic indicators we got last week, it certainly suggests that the economy is improving,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
MSCI’s all-country world stock index was flat, and the pan-European FTSEurofirst 300 index of leading regional stocks was down 0.5 percent.
On Wall Street, the Dow Jones industrial average was up 16.92 points, or 0.1 percent, to 17,517.86, the S&P 500 had lost 1.09 points, or 0.05 percent, to 2,051.23 and the Nasdaq Composite had added 11.70 points, or 0.25 percent, to 4,781.26.
Shares of Monsanto were up 4.6 percent in late morning New York trading after Bayer unveiled a $62 billion bid for U.S. seeds company Monsanto. Bayer AG declined in European trading.
Investors also digested economic data that showed euro zone private sector growth in manufacturing and services slowing down a little in May, even though Germany continued to power ahead.
In the currency markets, the U.S. dollar gained against the euro, but slipped against the yen on Japanese trade data and U.S. resistance to currency intervention from Tokyo.
The dollar index, which measures the greenback against a basket of six major rivals, was last up 0.03 percent to 95.36.
Brent crude prices were down 1 percent, on pace for a four-day losing streak and matching a similar run in mid-April, as investor focus returned to global supply, with Iran insisting on a rise in oil exports and U.S. drillers slowing the reduction in rigs. U.S. crude was down 0.5 percent at $48.17.
Short-dated U.S. Treasury yields rose, with the two-year yield hovering at its highest in two months on Fed rate-hike bets.
The yield on two-year Treasury yield hit 0.905 percent, within striking distance of the two-month peak of 0.920 percent set last Thursday. Benchmark 10-year Treasury notes were up 2/32 in price with a yield of 1.842 percent, down 1 basis point from Friday.
In the metals market, benchmark copper on the London Metal Exchange was down 0.3 percent at $4,565 a tonne at 1345 GMT.
Copyright Reuters, 2016
Courtesy : BRecorder