US Fed Chief: December Rate Hike Possible

The Federal Open Market Committee is scheduled to meet December 15-16 to discuss whether the economy is stable enough to handle higher interest rates. “The main driver behind the down move is that more market participants now believe that the Fed will begin raising rates this year”, Commerzbank analyst Daniel Briesemann said.

Yellen stressed that no decision had yet been taken and a move in December would continue to remain data dependent.

Investors will closely parse the October jobs report, which is due out Friday. Rates hike in December is highly likely given the current situations.

“Everything is about the Fed and that it looks like they’re finally going to raise interest rates, unless we get a real disappointing jobs number tomorrow”, James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. But by delaying interest-rate hikes for months, the Federal Reserve has created uncertainty that gives businesses an excuse not to invest in capital projects, Malpass said.

ASIA’S DAY: Japan’s benchmark Nikkei 225 added 0.8 percent to 19,265.60 while South Korea’s Kospi inched fell 0.4 percent to 2,041.07. That was driven in part by a rush into the Financial Select Sector SPDR ETF XLF, +1.02% the iShares Russell 2000 ETF IWM, +0.71% the WisdomTree Europe Hedged Equity Fund HEDJ, +0.71% and the First Trust Dow Jones Internet ETF FDN, +0.45%.

“Moving in a timely fashion – if the data and the outlook justify such a move – is a prudent thing to do because we will be able to move in a more gradual and measured pace”.

“The fact that Yellen is not the lone hawk on the case”, he said, “has added momentum to the dollar’s trade-weighted gain over the last 24 hours”. Expectations are for non-farm employment change to rise 179,000, up from 142,000 in September, and for unemployment rate to be unchanged month-on-month at 5.1 percent. The Standard & Poor’s 500 index fell 0.4 percent to 2,102.31 and the Nasdaq composite 0.1 percent to 5,142.48.

The single currency tumbled 1.1 per cent to $1.0845, its weakest level in three and a half months.

Singapore’s key Straits Times Index closed down 0.6%, ending two days of gains, while stocks in the Philippines extended losses for a second day to the lowest close since Oct 22, with domestic investors selling shares.

In metals, gold fell $2.00, or 0.2 percent, $1,104.20 an ounce, silver fell eight cents, or 0.5 percent, to $14.98 an ounce and copper fell 7 cents, or 3 percent, to $2.255 a pound.