Wall Street stocks, dollar subdued as Fed readies rate cuts
U.S. stocks little changed as markets eye Fed rate cuts
Treasury yields increase
U.S. dollar ticks up
Oil rebounds
By Lawrence Delevingne
Aug 22 (Reuters) -Stocks and the dollar remained subdued on Thursday after Federal Reserve minutes signalled U.S. interest rate cuts were set to begin in a few weeks' time.
On Wall Street, the Dow Jones Industrial Average .DJI fell 0.20%, to 40,806.74, the S&P 500 .SPX lost 0.05%, to 5,617.78 and the Nasdaq Composite .IXIC lost 0.13%, to 17,896.
The Fed minutes, released Wednesday, said the "vast majority" of policymakers felt that, if data came in as expected, a September cut was likely to be appropriate - validating market expectations.
On Thursday, fresh data showed the number of Americans filing new applications for unemployment benefits rose in the latest week, but the level remained consistent with a gradual cooling of the labor market.
Steve Englander, a markets strategist for Standard Chartered Bank, said the Fed minutes showed the bank was in sight of its inflation target and unemployment is rising, putting a 50 basis point interest rate cut "on the table."
"If they are not announcing that they have won on inflation, they are saying they expect to win relatively soon," Englander wrote in an email on Thursday.
Global stocks, after a phenomenal rebound from early-month lows plumbed after a bout of volatility, were also muted.
European shares .STOXX gained 0.55%, helped by retail .SXRP stocks, after a subdued trading session in Asia. They added to initial gains after data for the euro zone showed surprising strength in business activity this month.
MSCI's gauge of stocks across the globe .MIWD00000PUS was little changed.
Oil prices steadied after falling for a fifth straight day as investors worried about the global demand outlook before a decline in U.S. fuel inventories provided a floor.
U.S. crude CLc1 gained 0.83% to $72.53 a barrel and Brent LCOc1 rose to $76.72 per barrel, up 0.88% on the day. O/R
Some euro zone bond yields edged upwards after the euro zone business activity survey, which potentially weakens expectations for two more rate cuts from the European Central Bank this year.
U.S. PMI figures are due later in the day.
Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.3%.
DOLLAR DOWNTREND
The dollar index =USD, gained about 0.4%. It dipped to 100.92 overnight for the first time this year.
Lower U.S. rates would give central banks around the world room to move. On Thursday the Bank of Korea opened the door to a cut in October, while Bank Indonesia has lined up cuts in the fourth quarter.
Still, rates and currency markets see a U.S. easing cycle as having further to run than other countries.
Interest rate futures markets have fully priced in a 25-basis-point cut from the Fed next month, with a 1/3 chance of a 50-bp cut. They project around 220 bps of U.S. easing by the end of 2025, to a rate of 3.145%, against around 160 bps for Europe, a 2.06% rate. FEDWATCH0#ECBWATCH
On Thursday, the yield on benchmark U.S. 10-year notes US10YT=RR rose 7.6 basis points to 3.852%, from 3.776% late on Wednesday. The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations, rose 7.7 basis points to 3.9993%, from 3.922% late on Wednesday.
The euro, which has made strong gains this month, fell about 0.4% to $1.1104.
In Britain, the pound initially rose to a new 13-month high on the dollar and also strengthened against the euro after British business activity data showed steady growth momentum going into the second half of 2024. The pound was last little changed at $1.3087. GBP/
Investors said the dollar was facing a downtrend.
"The unequivocal signal from the (Fed) minutes has been the catalyst for the latest leg down in the U.S. dollar," said National Australia Bank's head of currency strategy, Ray Attrill.
"It is likely that the break above $1.30 on cable looks sustainable," he said, using a nickname for the sterling/dollar pair. "And similarly for the euro ... we're talking about potentially a $1.10-$1.15 range in coming weeks."
World FX rates YTD http://tmsnrt.rs/2egbfVh
Reporting by Lawrence Delevingne in Boston, Tom Wilson in London and Tom Westbrook in Singapore; Editing by Shri Navaratnam, Tom Hogue, Christina Fincher and Chizu Nomiyama
To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.
