by ©Reuters. FILE PHOTO: A pedestrian looks at an electronic board displaying various countries’ stock market indices outside a brokerage firm in Tokyo, Japan February 26, 2016. REUTERS/Yuya Shino/File Photo
By Sinead Carew and Tom Wilson
NEW YORK/LONDON (Reuters) – The closed lower on Tuesday as investors awaited guidance on the Federal Reserve’s path to rate hikes, while U.S. oil futures rallied on hopes that China could ease the COVID-19 outbreak. eases restrictions that have fueled fears about the global economy.
The US dollar fell against the Japanese yen, while the dollar surged as sentiment improved on hopes China would ease lockdowns after health officials talked about speeding up COVID vaccinations for the elderly.
US Treasury yields rose ahead of a public appearance by Fed Chair Jerome Powell and a set of data due later in the week. A survey released on Tuesday showed that US consumer confidence fell further in November amid ongoing concerns about the rising cost of living.
Richmond Fed President Thomas Barkin on Monday quashed speculation that the Federal Reserve would reverse the course of interest rates relatively quickly next year in comments late Monday.
And after similar messages from other Fed officials on Monday, investors at a Brookings Institution event on Wednesday eagerly awaited Powell’s comments on the US economy and jobs outlook. Earlier this month, Powell dashed hopes of monetary easing following a Fed meeting.
“No one is ready to buy ahead tomorrow when Powell speaks. Everyone’s nervous about what he’s going to say,” said Ron Saba, senior portfolio manager at Horizon Investments in Charlotte.
However, Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott, previously said that weaker consumer confidence may have played a small part in weakening Treasury yields, weakening the dollar and boosting equities, as investors viewed it as “ammunition.” for the Fed to ease its hawkish impulse.”
While the S&P 500 rose 3.07 points, or 0.01%, to close at 33,852.53, the S&P 500 lost 6.31 points, or 0.16%, to close at 3,957.63.
The price fell 65.72 points, or 0.59%, to 10,983.78 under pressure from tech-sector heavyweight Apple (NASDAQ:), which makes its iPhones in China and has been hit by COVID-related protests there.
The MSCI index of global equities gained 0.01%.
US Treasury bond yields rose in a choppy trade as investors waited for upcoming data including US third-quarter gross domestic product, Chicago manufacturing numbers, factory activity based on the Institute for Supply Management and Friday’s payrolls – and non-farm payrolls for November.
Yields on the benchmark 10-year bond rose 5 basis points to 3.752% from 3.702% late Monday. The 30-year bond yield was last up 5.6 basis points to 3.8049%.
“It’s going to be a busy second half of the week with all the data points we’re expecting. But the main focus will be on inflation and jobs,” said Subadra Rajappa, head of US interest rate strategy at Societe Generale (OTC: ) in New York.
On the currency side, the rate rose 0.188%, while the euro fell 0.11% to $1.0326.
The Japanese yen rose 0.19% against the greenback to 138.68 per dollar, while sterling was last traded at $1.1946, down 0.10% on the day.
The Aussie was last up 0.54% against the dollar after rising 1.4% earlier.
Oil prices rose on hopes of an easing of China’s tight COVID-19 controls that had fueled demand concerns but concerns that OPEC+ would leave production unchanged at their upcoming meeting limited gains.
Five OPEC+ sources said OPEC+ is likely to leave oil production policy unchanged at its meeting on Sunday, while two sources said an additional production cut is also likely to be considered. However, no one thought another cut was very likely.
Futures rose 1.24% to $78.20 a barrel while closing at $83.03, down 0.2%.
Gold prices rose on the back of the dollar’s decline and hopes for less aggressive US interest rate hikes in the future.
rose 0.5% to $1,749.39 an ounce. The US gained 0.45% to $1,748.10 an ounce.
