Money

Dollar, bond yields dip on inflation data as stocks soar

Dollar, bond yields dip on inflation data as stocks soar”

The dollar weakened and government bond yields fell to multi-week lows on Friday after a benign reading of US inflation in June and soft retail demand raised doubts the Federal Reserve would increase interest rates later this year.

Bond prices rallied after the Labor Department said the consumer-price index was unchanged in June from the prior month. Core CPI, the measure that excludes volatile energy and food products, remained steady at 0.1% on a monthly basis, falling short of the forecasted 0.2%.

The kiwi was battered early in the week by disappointing domestic data but gained sharply toward the end of the week amid speculation the Reserve Bank may be more inclined to hike interest rates in the face of increases and bullish talk from other central banks including the Bank of Canada.

The falling price of gasoline also helped hold down United States retail sales, which contracted for the second straight month in June, while manufacturing output rose slightly but slowed in the second quarter, according to two separate reports Friday. The US was expected to report a small rise of 0.1% in retail sales and 0.3% in the retail control group.

Amid the bullish backdrop, investors will likely be parsing the latest U.S. inflation data, released last night, for more signs as to how the Fed will proceed.

The benchmark 10-year U.S. Treasury note US10YT=RR rose 6/32 in price to yield 2.3248 percent.

More news: House refuses to ban transgender surgery for troops
More news: Shark bites man swimming off Florida beach
More news: Penn Station Construction Begins Today, Triggering Delays for Commuters

The increase in core prices reflected 0.2% growth in shelter prices as well as higher prices for medical care, motor vehicle insurance, education, and personal care. Other data on Friday showed industrial production picked up in June amid a rise in output at mines and factories.

USA interest rates futures rose as traders pared their viewthe Fed would increase rates again in 2017.

The euro vaulted to a 14-month high of $1.14895 in Asian trade. The yen surged by 0.58%, with dollar/yen trading at 112.60. Matters appeared to kick-off even before Chair Yellen's opening statement was read at 10:00 AM on Wednesday, as the Monetary Policy Report to Congress that was released at 8:30 AM seemed to catch trader's attention as the final paragraph of the report reiterated the "Fed Put" that has helped to keep equity prices elevated. Inflation has climbed just 1.6 percent from a year ago. During her congressional testimony this week, Fed Chairwoman Janet Yellen repeated her belief that temporary factors were keeping a lid on consumer prices, but said she would watch them "very closely".

Given the present outlook, we expect the Fed will likely raise rates another 25 bps this year as well as begin the process of slowly unwinding its balance sheet sometime in the fourth quarter. Electricity costs slid 0.6 percent. It was the yield's largest weekly decline since the week ended June 2.

USA 10-year yield fell to 2.303 percent, from 2.348 percent late on Thursday. The contract gained 59 cents, or 1.3 percent, to settle at $46.08 per barrel on Thursday.

The most-active US gold futures for August delivery futures settled up $10.20, or 0.84 percent, at $1,227.50 per ounce.



Like this

Latest


15 July 2017
PUBG First Person Only Servers Announced for Monthly Update
They'll be available in North America and Europe first, before rolling out in other regions. Let's hope the first person servers have been fairly perfected before going live.

14 July 2017
Women's Raj: India skipper Mithali continues to raise bar
Raut's brilliant knock ended when she tried to hook Perry for six but could only pick out Nicole Bolton on the boundary rope. She scored nine centuries and 46 half-centuries during her career, her highest being an unbeaten 173 against Ireland.

13 July 2017
Tech firms protest proposed changes to U.S. net neutrality rules
The announcement was surprising considering that AT&T claims to be on the opposing side of the FCC's 2015 net neutrality rules . The "fee" is satire and mocks what could happen in the net neutrality rules are dumped, the group said in a statement.

13 July 2017
You will start seeing ads in Facebook Messenger in the coming months
There are Sponsored Messages , but it requires the user to initiate the conversation with brands and business. Facebook Messenger ads could be rolled out to all of the service's 1.2 billion users sooner rather than later.

12 July 2017
AP, Honda: Takata airbag inflator kills man fixing Accord at home
Honda says the man died in June 2016 when the airbag exploded, but they were only recently informed of the incident. The individual working on the vehicle in Florida died a day after sustaining injuries when the air bag deployed.

12 July 2017
Mosul: Clashes continue as troops target IS 'holdouts'
That final push poses significant danger to civilians in the area, whom the jihadists may use as human shields. The battle for Mosul killed thousands and displaced more than 897,000 people.

10 July 2017
Bavuma and De Bruyn lead Proteas fightback
It is the first time since 1951 that an England off-spinner has claimed 10 wickets in a Test at Lord's. South Africa's proud and spotless record at Lord's since returning to world cricket is under threat.

09 July 2017
Clashes as IOK marks key anniversary
The security forces and intelligence agencies are apprehending trouble in the Kashmir Valley on Wani's death anniversary. Clashes broke out between protesters and government forces in apple town Sopore of North Kashmir's Baramulla district.

07 July 2017
Tesla Has Room To Run As Model 3 Gets Ready To Launch
August production "should be" 150 cars , he said, and he projected more than 1,500 of the vehicles will be made in September. Tesla finished the first half with sales of 47,100 vehicles, just meeting its goal of delivering 47,000 to 50,000 vehicles.

07 July 2017
Overwatch Villain Doomfist Now Playable In Public Test Realm
To introduce him, Blizzard has released his origin story trailer and revealing his name as Akande Ogundimu . The Best Defense ...: Doomfist generates temporary personal shields when he deals ability damage.



Recommended