Goldman Reduces Expectations Of September US Rate Hike

The yield on the two-year Treasury note, the coupon maturity most sensitive to Fed policy expectations, on Tuesday fell 6 basis points, or 0.06 percentage points, to 0.73 percent. It reduced the market’s gains this year to 9.6 percent.

Automaker Toyota is losing more than 1 percent and Honda is down 1 percent. LT Group Inc. rose 0.4 percent to P17.06, while PLDT Inc. added 0.2 percent to settle at P1,810.

On Wednesday, Sept 7, 2016, the dollar decline to its lowest in over a week compared to the yen as downcast USA data made an interest rate surge this month not likely and drove investors to reduce fortunate bets in the dollar. Shares in Tokyo fell as the yen strengthened.

Summers of the Washington Post points out, the latest economic data shows a lack of inflation and a far less healthy economy than Yellen and company anticipated just last month following the annual Fed meeting in Jackson Hole, Wyoming.

The Institute for Supply Management’s non-manufacturing purchasing managers’ index fell to 51.4 last month, far short of economists’ expectations and the largest one-month drop since November 2008.

In prepared remarks for a speech in Nevada, Williams said: “we’re not quite at our [inflation] target yet, but the combination of fading transitory factors and a strong economy should help us get back to our 2% goal in the next year or two”, Williams said. Treasury markets were closed worldwide Monday for the Labor Day holiday.

Hong Kong was up 0.1 per cent – building on a four-day rally – while Shanghai put on 0.2 per cent and Seoul 0.3 per cent. South Africa’s rand led gains among the world’s major currencies after data showed the nation avoided a second recession in seven years as mining and factory output rebounded.

The dollar was last down 0.4 percent at 101.56 yen, having fallen as low as 101.18, its weakest since August 16.

At 5 p.m., the dollar stood at ¥101.54-54, down from ¥103.35-35 at the same time Tuesday.

In addition, the US Dollar exchange rates eased lower during last week’s trade as several sets of unsatisfactory US data failed to support the markets’ expectations of a Fed interest rate hike being possible in September.

The report showing American services industries expanded in August at the weakest pace in six years jolted USA markets from a state of limbo after Friday’s lukewarm reading on August payrolls.

The spot gold price stayed supported during Asian trading hours on Wednesday after weak U.S. data sank the United States dollar alongside expectations of a September Fed rate hike. “PMIs are going to have to stage quite a rapid recovery in the next month or so”.

The Australian dollar took a breather. There were also sharp gains in the Malaysian ringgit, and the Singapore and New Zealand dollars. The dollar’s retreat boosted the allure of commodities, spurring gains in gold and a rebound in New York-traded crude oil.