[Mercato USA]Stocks Rebound, Fed Officials Stress Maintaining Resilience – Yen 139 High Range – Bloomberg

The US stock market fell on the 14th. There was a huge scuffle, but the selling became dominant in the final round. Two Federal Reserve officials underlined their determination to maintain tight monetary policy until inflation is pushed toward its 2% target.

The yen fell against the dollar. At one point, the dollar was lowered to 140.80 yen, but was reluctant to fall to the upper level of 139 yen.

“Perhaps a transition to a slower pace of rate hikes will soon be appropriate,” Fed Vice Chair Brainerd said at an event in Bloomberg’s Washington office. This helped slightly to improve sentiment. “We’ve done a lot, but there’s more we need to do,” he said. At the Federal Open Market Committee (FOMC) meeting in December, he did not explicitly say he would cut rate hikes to 0.5 percentage point, nor did he elaborate on the word “close.”

Vice President Brainard says rate hikes could slow ‘soon’

“I think Brainerd’s comments underscore the uncertainty about where things are headed and the FOMC’s reliance on data,” said Jake Schlemeyer, investment manager at Harbor Capital Advisors. “I don’t want it to be misinterpreted as weakening repressive policies”.

Fed Governor Waller’s harsh statements sparked market euphoria following last week’s release of October’s consumer price index (CPI).

Long road to rate hike, 50 basis point consideration in December or beyond: Fed Waller

Barings’ chief global strategist Christopher Smart said last week’s rally in the S&P 500 index, the biggest weekly rally since June, appeared unsustainable. “The bad news is that the economic situation remains very uncertain and data over the next few months is likely to be more mixed and mixed. There is still a long way to go before the rate falls to the Fed’s 2% target, so officials at the Feds are increasingly trying to dispel the market illusion that a real policy tipping point is at hand.” rice field.

The S&P 500 fell 0.9% to 3957.25 from the previous trading day. The Dow Jones Industrial Average fell $211.16, or 0.6%, to $33,536.70. The Nasdaq Composite Index fell 1.1% and the Nasdaq 100 Index fell 1%.

US Treasuries are down. As of 4:09 p.m. New York time, the 10-year yield was up 5 basis points to 3.87%.

The dollar is slow in the foreign exchange market. He reacted to Fed Vice Chair Brainerd by saying that a transition to a slower pace of rate hikes would likely be appropriate shortly. The yen weakened on the back of rising US Treasury yields.

The Bloomberg Dollar Spot Index, which tracks the movement of the dollar against 10 major currencies, rose 0.2%. As of 4:15 pm New York time, the dollar was up 0.7% against the yen at 139.83. The euro fell 0.2% to $1.0329 against the dollar.

“The United States leads the rest of the top 10 central banks, has the highest terminal rate of any of the top 10 economies, and has the highest terminal rate,” Jefferies strategist Brad Bechtel said in an October report. pace than elsewhere, which should continue to support the dollar”.

New York crude futures fell for the first time in three trading days. Concerns about Chinese demand increased and sentiment worsened as the dollar strengthened.

New York Mercantile Exchange (NYMEX) West Texas Intermediate (WTI) futures for December fell $3.09 (3.5%) to $85.87 a barrel, the biggest drop in a month since Oct. 14. The London ICE North Sea Brent contract for January fell $2.85 to $93.14.

“Oil prices were dragged down by a much weaker near-term demand outlook,” said Ed Moya, senior market analyst at Oanda. “The coronavirus situation in China has not improved and the US economy appears to be weakening rapidly,” he said.

The New York gold market rallied for the third day in a row. When the dollar surged in response to Waller’s remarks, selling took precedence, but when the dollar crashed, gold soared.