Asian stocks and dollar firmer as Yellen hints at March rate hike

TOKYO - Asian stocks rose early on Wednesday as Wall Street set record highs overnight after Federal Reserve Chair Janet Yellen spoke in support of an interest rate hike next month, while the dollar hovered near three-week highs.

Yellen said on Tuesday that the Fed will probably need to raise interest rates at an upcoming meeting in March, and that delaying rate increases could leave the Fed's policy-making committee behind the curve.

Yellen's comments boosted US bank stocks, helping push Wall Street indexes to record highs overnight.

The rise in US stocks nudged MSCI's broadest index of Asia-Pacific shares outside Japan to a 19-month high. The index was up 0.3 percent early on Wednesday.

"Fundamentally, the US banks are simply being used as a vehicle to express reflation and 'Trumponomics'," wrote Chris Weston, chief market strategist at IG in Melbourne.

"Although last night really belonged to Janet Yellen whose prepared comments that waiting too long to tighten would be 'unwise' and a further review its policy stance will take place at its upcoming meetings."

Japan's Nikkei added 1 percent and Australian stocks rose 0.9 percent.

In currencies, the dollar index against a basket of major currencies stood at 101.230, near a three-week high of 101.380 scaled overnight as investors reassessed the possibility of the Fed hiking interest three times this year following Yellen's comments.

US interest rate futures implied traders saw about a 41 percent chance of at least three rate increases in 2017, up from a 33 percent chance on Monday, CME Group's FedWatch program showed.

The greenback was a shade higher at 114.370 yen after gaining about 0.5 percent the previous day, when it rose to a two-week high of 114.500. The euro was steady at $1.0576 after slipping to a one-month trough of $1.0561 overnight.

The dollar was supported as US Treasury yields rose on the Fed Chair's comments, with the benchmark 10-year note yield climbing about four basis points to an 11-day high the previous day.

The stronger dollar, which puts non-US buyers of dollar-denominated commodities at a disadvantage, weighed on crude oil prices.

US crude was down 0.3 percent at $53.07 a barrel. Crude already came under pressure the previous day on evidence of surging US stockpiles.

Spot gold was little changed at $1,228.00 an ounce after paring its gains the previous day on a firmer dollar.

source: news.abs-cbn.com

Dollar stands tall, hoisted by higher US yields on Trump bets

TOKYO - The dollar nudged up to a six-month high in early Asian trading on Monday, as investors continued to back bets that the administration of President-elect Donald Trump would embark on expansionary fiscal policies and boost growth.

The dollar rose to 111.125 yen, its highest since May 31. It was last down 0.1 percent at 110.82 as investors positioned ahead of U.S. Thanksgiving holiday later in the week.

"The market is buying the dollar and selling U.S. Treasuries, and it seems this trend may continue because we don't know the details of 'Trumponomics,' and we will not have it until after the 20th of January next year," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

"Until then, investors need to follow the trend," he said, adding, "We might see some correction ahead of Thanksgiving."

Data from the Commodity Futures Trading Commission released on Friday showed that speculators trimmed their dollar bets in the week through Nov. 15, as profit taking reduced net long positions after they had risen seven straight weeks.

Japanese yen net longs, meanwhile, posted their lowest level since early June, the data showed, with the yen a casualty of the dollar's strong rally.

Yields on Treasuries of all maturities have registered their largest two-week gains in more than five years as investors dumped U.S. government debt after the Nov. 8 U.S. presidential election.

The yield on U.S. benchmark 10-year Treasury notes rose to a one-year high of 2.364 percent on Friday. It last stood at 2.344 percent, compared to its U.S. close of 2.337 percent.

Also underpinning the greenback, most market participants expect the U.S. Federal Reserve to raise interest rates at its Dec. 13-14 policy meeting.

And expectations that a Trump presidency will usher in higher growth and lead to faster-than-expected Fed hikes have helped power the dollar to 13-1/2-year highs against a basket of currencies.

The dollar index, which tracks the U.S. unit against a basket of six rivals, added 0.1 percent to 101.34, after adding more than 4 percent last week to mark its biggest weekly rise since March 2015. It notched a high of 101.48 on Friday, its highest since March 2003.

On Thursday, Fed Chair Janet Yellen told a congressional panel that a rate increase was likely "relatively soon."

James Bullard, a voting member of the U.S. central bank's rate-setting committee, said last week that the Fed will raise U.S. interest rates in December barring a major shock, such as global market volatility or bad U.S. jobs data.

The euro inched up 0.1 percent to $1.0598 but remained not far above Friday's 11-month low of $1.0569.

source: news.abs-cbn.com