Japanese stocks edge towards two-year high, dollar firms before Yellen

"Interest rates have to be low for growth to recover" Draghi told an audience
Author

29 June, 2017

It was last up 0.1 percent at 111.94 yen.But U.S. data on Monday gave investors reason to be cautious about buying the dollar.

Utilities, which instead benefit from loose monetary policy, fell 0.2 percent but came off lows after media reports that Draghi's remarks on Tuesday had been overinterpreted.

"We think that the euro's latest rise against the U.S. dollar was a justified reaction to Mario Draghi's hints", analysts at Capital Economics said. The GBP/EUR rate has hit lows of 1.1260 this morning, while the Euro traded through 1.1350 versus the Dollar, as Draghi suggested there is room for the European Central Bank to move away from an ultra-accommodative monetary policy. He cited European Central Bank research showing a broader measure of joblessness, including those who want to work more hours but can't, could be as high as 18 percent, nearly twice as high as the official rate.

Meanwhile German 10-year bond yields, the European benchmark, surged from 0.238 per cent to reach highs of 0.405 per cent, the highest in a month.

The delay of the healthcare vote eroded expectations that President Donald Trump can succeed at realizing his agenda of tax reform and infrastructure spending, analysts said.

Analysts say that Draghi's optimism on growth and recovery and his general dismissal of headline inflation helped to prop up the Euro. Though saying the eurozone required "considerable" stimulus that was perceived as a modest change in tone to the previous form of words of "very substantial".

Instead, the central bank is prepared to let prices take longer to reach its target of just under 2 percent, even after more than four years of inflation misses.

Federal Reserve Chair Janet Yellen said on Tuesday that by standard metrics, some asset valuations look high while Vice Chair Stanley Fischer warned that central bank must remain vigilant in monitoring financial stability risks.

Federer crushes Zverev to clinch ninth Halle title
There is no doubt that Zverev is going to have to produce something magical against Federer today if he is to get the win. Federer , 35, despatched Russian Karen Khachanov 6-4, 7-6 (7/5) on Saturday to move into the final.

Hong Kong's Hang Seng led declines, falling as much as 0.7 percent.

ENERGY: Oil futures fell, with benchmark USA crude slipping 8 cents to $44.16 a barrel in electronic trading on the New York Mercantile Exchange.

Speaking in London, Federal Reserve Chair Janet Yellen did little to suggest United States policy makers have altered plans for a third interest rate hike later this year, saying "it will be appropriate to the attainment of our goals to raise interest rates very gradually". The single currency was also up about 1.4 percent against the yen at levels not seen since early 2016.

Tim Evans, Citi Futures' energy futures specialist, said in a note that oil's move was "a technical correction after the declines of the past five weeks" helped along by boosts from a weaker dollar and forecasts for a weekly draw in US crude inventories.

Spot gold added 0.2 percent to $1,246.90 an ounce.

Copper rose 0.90 percent to $5,846.50 a tonne.

Crude oil futures gave back some of Tuesday's near 2-percent gain made on the back of the weaker dollar and expectations that U.S. crude inventories might decline for a third consecutive week.


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