Asian stocks climb after Fed move; dollar drops: Markets wrap
- Author: Zachary Reyes Mar 17, 2017,
Mar 17, 2017, 2:44
US producer prices rose more than expected last month, marking the most robust year-on-year gain in almost five years.
The major stock index ETFs traded higher Wednesday afternoon following the much-anticipated arrival of a March rate hike and a bounce in oil prices.
Yields on two-year notes were down at 1.30 percent, having fallen 8 basis points overnight in the biggest daily drop since June last year.
-The Federal Reserve will announce its rate decision at 6 p.m. London time; fed-fund futures signal that traders see an interest-rate increase as nearly certain.
Some of the dollar weakness came from the strength in the British pound, which advanced 0.6% after a YouGov poll showed that 57% of Scottish voters do not want independence from the UK.
While a rate hike would be seen as a negative for gold, investors should note that, following the first rate hike of the current tightening cycle in December 2015, gold started 2016 on very solid footing. The Australian dollar rose to hit high at $0.7720, edging away from a daily low of $0.7587 hit early in the U.S. session.
European shares achieved their highest closing level in two weeks on Wednesday, boosted by basic resource and oil stocks, while French aero plane seat-maker Zodiac slumped after its latest profit warning. "It's a sign of confidence the USA economy can now stand on its own two feet with less monetary accommodation, we believe".
Dow Jones closed up by 0.54 percent, S&P 500 ended up 0.83 percent, Nasdaq finished the day up by 0.74 percent. The German DAX, France's CAC 40 index and the U.K.'s FTSE 100 all rose about 0.2 percent.
USA inflation data overnight cemented rate hike expectations.
U.S. Treasury yields plummeted on Wednesday after the Federal Reserve raised interest rates for the second time in three months as expected, but did not flag any plan to accelerate the pace of monetary tightening.
Prices of oil, one of Canada's major exports, were up for a second day, helped by USA data showing crude inventories had dipped after rising for nine weeks.
Asian markets are broadly higher after the Federal Reserve sounded less hawkish than expected.
-The Stoxx 600's commodity-producer sector advanced 1.5 percent; Rio Tinto climbed 2.2 percent, heading for a third day of gains. U.S. WTI crude futures gained 27 cents on Thursday to trade at $49.13 per barrel.