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v US’s Atlanta Fed President Lockhart
states that Fed is ‘close’ to hiking interest rate
v US’s Fed Vice Chairman Fischer said
U.S. inflation is only temporarily “very low”
v Malaysia's industrial production
growth slows in line with market expectation
v Japan posts a current account surplus
of JPY558.6 billion in June
v China’s exports decrease 8.3% y/y in
July.
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·
US –
Atlanta Fed President Lockhart noted that the US economy has “made great gains
and is approaching an acceptable normal” and that “policy should shortly
acknowledge this reality”. He also reiterated his comments from last week that
monthly dataflow is unlikely to significantly influence his decision on when to
commence policy normalisation.
·
US –
Federal Reserve Vice Chairman Fischer stated that while inflation remains low,
a major part of that is “temporary” and that the price of oil and raw materials
will “stabilise at some point”. That said, he added that “employment has been
rising pretty fast relative to previous performance, and yet inflation is very
low…and the concern about this situation is not to move before we see
inflation, as well as employment, returning to more normal levels”.
·
Currency
– A reversal in commodity prices proved more important to markets than a
reaffirmation of an imminent start to the US tightening cycle and the USD eased
back with gains lead by commodity currencies.
·
Equity
– US equities bounced back from last week’s declines, buoyed by gains in
Chinese stock markets, a bounce in oil prices, and the announcement that
Berkshire Hathaway would purchase Precision Castparts for US$37.2 billion.
·
Rate
– US and core euro area sovereign bonds sold off on light volumes, with moves
supported by the more positive tone on equity markets. US 10-year yields rose
by 5 bps to 2.23%, although the 2-year yield was little changed.
·
Energy
– Crude oil prices were stronger with Brent outperforming WTI. The spread
between Brent and WTI reached $US5.4 per barrel after the strong price rally
late in the day.
Precious Metal – Gold prices
rose to a three-week high and other precious metals rallied Monday, after a
Federal Reserve member’s comments threw into question the timing of the central
bank’s expected rate increases. Gold prices were traded higher by 1.16% above
$US1100. |
INDICATIVE MAJOR CURRENCIES
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