Markets rise as investors bet interest rate hike will be delayed

US stocks started Monday session lower but ended with solid gains as investors bet that the Fed will likely delay the rate hike after Friday’s weak monthly jobs report. The Monday speech of New York Fed President William Dudley also reinforced expectations that the Fed will wait longer before raising interest rates. Dudley reiterated that the central bank will be data dependent in deciding when to raise interest rates and mentioned he expected the path of rate hikes to be “relatively shallow.” The S&P 500 and Dow Jones Industrial Average rose 0.7%. The S&P 500 is up 1.1% for the year. The trading volume on US exchanges at 6.2 billion shares matched the daily average for the last five sessions. The ISM report on Monday also pointed to weaker growth in first quarter as the pace of growth in US services sector fell to its lowest level in three months. Today at 15:00 CET the February Job Openings and Labor Turnover Survey results will be released by the Labor Department. The tentative outlook is positive for the dollar. At 15:00 CET April Economic Confidence Index by Investors Business Daily will be published. And at 20:00 CET February Consumer Credit will be published by the Fed. The tentative outlook is positive.

S&P 500 stock market index

Nikkei advanced 1.3 percent to a near two-week high on Tuesday after the lead from US markets eased investors’ concern about the impact of weak jobs data. Market sentiment was bolstered by the expectations that Fed will likely put off the rate hike until later this year. The dollar rose to ¥119.64 from ¥119.53 late Monday in North America. Market participants are optimistic about the long-run economic outlook as weaker yen is expected to boost corporate profits, while higher wages and bonuses negotiated this spring should boost domestic demand. Exporters rebounded with Toyota Motor Corp rising 1.0 percent and Nissan Motor Co adding 1.1 percent. Tomorrow in the morning at 00:50 CET February Trade Balance will be released in Japan. The tentative outlook is negative. At 01:00 CET the Bank of Japan releases its monetary policy statement. At the same time the March Eco Watcher’s survey results will be published. The tentative outlook is positive. And at 04:00 CET Bank of Japan Governor Kuroda will hold a press conference.

Today the Reserve Bank of Australia left the interest rates unchanged at 2.25, which led to more than 1 percent jump in the Australian dollar.

European stock markets will reopen today after Easter holidays and index futures point to higher opening. Euro is inching higher 0.1% toward $1.0937 after retreating from an overnight high of $1.10. Today at 9:00 CET final euro-zone Services and Composite PMIs for March will be released by Markit, the tentative outlook is neutral. At 9:30 CET March Services and Composite PMIs will be released by Markit for UK. The tentative outlook is positive. At the same time Bank of England’s Financial Policy Committee record of March meeting will be released.

Oil prices are falling today as investors are booking profits following the biggest gains yesterday in nearly two months.

Gold prices are retreating today from seven-week high as dollar is recovering. Asian demand is low due to relatively higher prices as indicated by less than a dollar an ounce premium at the Shanghai Gold Exchange over the global spot benchmark.

Gold price

 

Source: IFC Markets