A worrying lack of inflation globally is one reason investors are counting on Federal Reserve Chairman Jerome Powell to sound suitably dovish when testifying to Congress on Wednesday.
(MENAFN - Baystreet.ca) Canada's main stock index futures edged lower on Wednesday ahead of Bank of Canada's interest rate decision and U.S. Federal Reserve Chairman Jerome Powell's congressional testimony.
Traders will be listening to the exchanges Powell has with lawmakers on Wednesday and Thursday for hints about the Fed's next move on interest rates.
Delivering the Fed's semi-annual monetary report to Congress, Powell sends the strongest signal yet that the central bank is ready to cut interest rates for the first time in a decade, possibly as soon as the July meeting. They had implied a 25% probability of an aggressive cut before an upbeat U.S.jobs report on Friday.
SYDNEY, July 10 (Reuters) - Asian shares turned mixed on Wednesday while rising Treasury yields lifted the dollar as markets wondered if the world's most powerful central banker would confirm or confound expectations for USA policy easing this month.
The dollar edged toward a three-week high against a basket of major currencies on Wednesday, as fading expectations of an aggressive USA interest rate cut pushed Treasury yields higher. Trump's attacks have raised alarms that he is undermining the Fed's long-recognized independence from political pressure. Expectations for a 50 basis point rate cut this month have evaporated, according to analysts, but investors still expect a 25 basis point cut due to weak inflation and trade war worries. Constellation Brands declined 1.7% and Franklin Resources lost 1.2%.
Bank-heavy Italian shares .FTMIB rose 0.7%, outperforming the broader European markets that traded sideways.
Oil prices were supported by Middle East tensions and news that US stockpiles fell for a fourth week in a row, easing concerns about oversupply.
The 225-issue Nikkei Stock Average shed 31.67 points, or 0.15 percent, from Tuesday to close the day at 21,533.48.
The dollar's gains took the shine off gold, which eased 0.3% to $1,393.48 per ounce.
Hong Kong's Hang Seng index added 0.32 percent at the final hour of trading. The Russell 2000 index of smaller company stocks added 1.20 points, or 0.1%, to 1,562.59. It gained 17 cents to $57.83 a barrel Tuesday.
Oil prices have jumped with West Texas Intermediate crude up 1.9% at $58.90, and Brent crude up 1.6% at $65.20. Higher interest rates boost the dollar, making dollar-denominated gold more expensive for buyers using other currencies and reducing investor interest in non-yielding bullion.
Against the dollar, the euro was steady at $1.1208 after hitting $1.1194, which was the lowest in almost three weeks.