Asian stocks mixed ahead of Fed meeting

The Dollar index rebounded from a two-month low as the market awaits Fed Chairwoman Janet Yellen’s speech in Jackson Hole this Friday.

BEIJING (AP) – Major global stock markets were mostly higher Monday as investors looked ahead to the Fed’s meeting in Jackson Hole, Wyoming, for clues on timing for possible interest rate hikes.

European markets also looked set for a lower open on Monday, with financial spreadbetter CMC Markets expecting Britain’s FTSE 100 to be off 0.2 percent, and Germany’s DAX and France’s CAC 40 to start the day down 0.1 percent. MSCI’s emerging equity index slipped 0.6 percent to the lowest in more than 10 days after rallying for six straight weeks. Wall Street logged modest losses on Friday, ending almost flat for the week. Benchmark 10-year notes were last up 8/32 in price to yield 1.55 percent, down from 1.58 percent late on Friday.

The weaker yen proved a boon for Japan’s Nikkei, which closed up 0.3 percent. It had skidded 2.2 per cent last week, as the dollar dipped below 100 yen.

China’s CSI 300 index retreated 0.6 percent and the Shanghai Composite lost 0.5 percent as investors took profits. Hong Kong’s Hang Seng shed 0.5 percent to 22,818.30 and Seoul’s Kospi added 0.9 percent to 2,017.94.

The case for an imminent rate hike was strengthened by Fed Vice Chairman Stanley Fischer’s comments that the US economy was close to hitting job and inflation targets.

“Fischer’s comments have raised some expectations in the market, particularly after (New York Fed President William) Dudley’s recent comments”, said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank.

Traders have priced in an 18 percent chance of a rate hike for September, up from 12 percent odds seen on Friday.

World stocks fell 0.13 per cent early on Monday but were flat at 0820 GMT (1:50 p.m.in India) after a bounce-back in Europe, led up by Syngenta after its proposed takeover by ChemChina was approved by USA regulators.

Meanwhile, crude futures came under pressure on Monday, as analysts showed doubt over whether leading oil producers would successfully tackle the supply glut seen the market. The stronger dollar is likely to weigh on commodities prices, especially crude oil, gold and silver in the near term.

Oil prices fell more than 2 percent, retreating from last week’s two-month highs, on worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising US oil rig count. September West Texas Intermediate crude (http://www.marketwatch.com/story/oil-prices-hammered-by-increase-in-us-rig-count-2016-08-22) slumped 2.7% to $47.21 a barrel, with some analysts blaming a rise in the USA oil-rig count last week.

Gold fell on Monday to its lowest in nearly two weeks as the dollar strengthened. Overall, spot gold was down 0.37 percent at $1,336 an ounce, having hit a low of 1,331.35 an ounce at one stage.