Talking Points:
- Asian stocks lacked direction on a slow news day for the region
- The US Dollar gained support from Janet Yellen’ latest public remarks
- Oil prices are holding up, with Brent leading the way
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Asian stocks were mixed Wednesday as investors parsed the latest comment from US Federal Reserve Chair Janet Yellen.
Hopes were also raised of lower US corporation and individual taxes after President Donald Trump hosted a bipartisan round table discussion on tax policy at the White House. For her part Janet Yellen stuck with a modestly hawkish tone and, when she had finished speaking, the chances of an interest rate rise in December was still priced at well above 70%.
In a day of scant Asian economic news the Nikkei 225 was among the day’s fallers, slipping 0.3%. The ASX 200 was also down, by 0.1%. Chinese stocks bucked the trend with the Shanghai Composite up by 0.1%.
The US Dollar found support in that Yellen speech, especially the part in which the Fed Chair said it was prudent to continue gradual rate rises despite some economic uncertainties. The Euro remained under a bit of pressure but EUR/USD was above the 5-week low hit Tuesday when investors worried about more fractured European politics in the wake of Germany’s election.
Gold prices were weaker, as they often are when the greenback rises. Crude oil prices edged up, still supported by supply worries centred on the Kurdish region of Iraq
The remainder of the day's economic data schedule has a decided US bias. Durable-goods orders, mortgage applications, pending home-sales levels and crude oil inventory figures are all coming up from the world’s largest national economy.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
