Asian Shares Mixed After Yellen Comments

Posted September 28, 2017

Gold dipped 0. percent to $1,290 an ounce.

Both New York Federal Reserve Bank President William Dudley and Chicago Fed President Charles Evans said they believe the USA economy's fundamentals are sound, and both said they support gradual rate hikes ahead.

"My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation", Yellen said, according to prepared remarks.

As of 12:43 p.m. HK/SIN, the dollar index was up 0.09 percent to 93.09.DXY.

The S&P 500 index closed up 0.01% Tuesday after briefly climbing above the 2,500 mark, earlier during the U.S. trading day.

Wall Street ended lower on Monday as a selloff in technology shares weighed down the Nasdaq and North Korea's threats kept investors on edge. The tax reform plans are set to be announced on Wednesday.

The tax reform speech by United States president Donald Trump in Indianapolis later on Wednesday - of which he had promised "the largest tax cut in the history of our country" - will be closely watched by investors given its possible repercussions for the dollar.

The FTSE 100 was up 0.38% to 7,313.51, while the pound was down 0.36% against the greenback at 1.3410, off earlier lows but with the dollar still underpinned by hawkish comments from Federal Reserve Chair Janet Yellen.

Evans' view appears to be in the minority at the Fed, where decisions on the appropriate level of interest rates are made every six weeks or so.

The index is down by 9.7% since US President Donald Trump's inauguration.

The quite hawkish remarks sent the dollar and US bonds higher as investors grew confident of another rate hike in December.

"In my view, it strengthens the case for a gradual pace of adjustments", Yellen said.

Dudley nodded to the three devastating hurricanes that have struck parts of the US south and the Caribbean, noting their effects will likely make it more hard to interpret economic data in coming months. The large-cap S&P 500 Index closed flat at 2,496.84.

-Germany's 10-year yield increased one basis point to 0.406 percent.

The aussie extended its losses for the third day reaching a six-week low of $0.7835 on the back of a stronger dollar and decreasing metal prices. ICE Brent crude for November settlement fell 87 cents, or 1.5%, to $58.15 a barrel.

In energy markets, oil prices hit lower despite the EIA report showing that U.S. crude oil inventories declined by 1.846mn barrels the past week while analysts anticipated oil inventories to increase by 3.422m barrels. The euro was at $1.1756-1757, down from $1.1812-1813, and at ¥132.48-49, up from ¥132.01-02.