Explanation of interest increase from Yellen

Wednesday, 27 Sep, 2017

The dollar gave back some earlier gains and Treasuries added to losses. Case-Shiller's national index rose 5.9%, up from 5.8%.

Dudley's comments were similar to his speech earlier this month, and reinforced the growing expectation that the Fed is set to raise rates for a third time this year in December.

Despite much of the threats between the USA and North Korea being considered trivial, there now appears to be a risk of accidental attacks. WTI crude declined, though was still close to a five-month high after Turkey threatened to shut down Kurdish crude shipments. In theory, the favourable global environment for those portfolio inflows could continue, helping SA to finance its current account deficit despite political and economic uncertainty and the prospect of further ratings downgrades.

Shelby has served for years on and previously led the Senate panel, which has direct oversight responsibility for the central bank and casts the first vote on White House nominees for the Fed Board of Governors.

Carnival said changes in fuel prices and currency exchange rates lowered its earnings by 3 USA cents per share, while non-cash impairment charges of US$392mln reflected a business realignment in Australia. "That could be more fundamental to the progress for Europe".

President Donald Trump warned North Korea on Tuesday that any USA military option would be "devastating" for Pyongyang, but said the use of force was not Washington's first option to deal with the country's weapons programme.

The Fed increased its benchmark lending rate twice in March and June, leaving it at a still-low range of 1 percent to 1.25 percent.

-Brexit negotiations are getting underway again. "But if he (US President Donald Trump) just waffles without any substance, the market is looking for any reason right now to take risk off the table". The federal funds rate, the interest rate the central bank charges banks on overnight loans, now sits in a range between one and one-and-one-quarter percent. The S&P 500 closed a fraction of a point higher at 2,496.84, with eight of the 11 main sectors ending lower.

Meanwhile, the technology-focused Nasdaq Composite Index (NYSEARCA:QQQ) advanced 0.2% to settle at 6,380.16. Futures traders give a December rate hike about a 55-percent probability, according to Reuters data. "Investment spending should also benefit from a better worldwide outlook and improvement in USA trade competitiveness caused by the dollar's recent weakness". The euro weakened against other currencies, hitting a 10-week low of 0.87545 British pound and two-week low of 1.14075 Swiss franc.

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

Regarding oil prices, WTI crude jumped by 0.69% to $52.24 per barrel and Brent rose by 0.48% to $58.72 after the API weekly report indicated that United States crude inventories declined by 0.761mn barrels in the past week compared to a rise of 3.40mn barrels expected. The spot price of gold dropped nearly to a level of $ 1,297.57 an ounce. The ASX 200 was also down, by 0.1%.

Risk appetite has returned to the marketplace at mid-week as world stock markets were mostly firmer overnight.

-The Japanese yen decreased 0.2 percent to 111.98 per dollar.