Economy

Gold slips as equities and dollar surge ahead of Fed meeting

Gold slips as equities and dollar surge ahead of Fed meeting”

The Fed, which starts its two-day meeting on Tuesday, is expected to announce the start of a program to taper its multi-trillion-dollar bond holdings built up during the financial crisis.

At a two-day meeting beginning later on Tuesday, the US central bank is expected to take another step toward policy normalisation with plans to trim its massive portfolio.

While inflation has perked back up a bit, largely because of higher oil prices, it's still below the Fed's 2% target.

US central bank leaders are expected to hold the key interest rate steady this week, but they may begin trimming a huge bond-buying program that was meant to boost economic growth.

"The trend in inflation has taken a downtick". In a speech early this month, influential New York Fed President William Dudley said while he was surprised that inflation had been so low, steady growth of the economy should eventually push wages higher, allowing the Fed to continue to raise rates "gradually".

Moreover, while Fed officials have expressed a desire to return to a Treasurys-only portfolio, meaning they would unload all of the mortgage-backed securities they purchased in recent years, that will take a long time under the plan the Fed is preparing to set into motion. On Wall Street, the futures for the Dow Jones industrial average and for the Standard & Poor's 500 were up 0.2 percent.

Ten of the 11 major S&P sectors were higher, led by a 0.59 percent gain in the financial index.

US government bond yields US10YT=RR jumped a hefty 14 basis points last week, but were little changed on Monday, as were most developed bond markets.

Shares of Orbital ATK hit a record high after Northrop Grumman said it would buy the missile and rocket maker for about $7.8 billion in cash.

South Korean shares dipped 0.1 percent, against a backdrop of caution ahead of the Fed meeting as well as continuing tensions on the Korean peninsula.

Advancing issues outnumbered decliners on the NYSE by 1,723 to 996. On the Nasdaq, 1,857 issues rose and 999 fell.

Down Under, the S&P/ASX 200 advanced 0.13%, with the heavily-weighted financials sub-index climbing 0.37%.

At 10:18 a.m. ET (1418 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 49.97 points, or 0.33 percent, at 15,223.00. Yields on 10-year Japanese bonds remain near zero, while those on German bunds are the least attractive versus Treasuries in nearly a year.

London .FTSE , Frankfurt .GDAXI and Paris .FCHI fluttered between flat to slightly lower after eight days of gains in the previous nine and a more 4 percent jump .FTEU3 in the last three weeks.

The gold mining portion of the group weighed, with Kinross Gold Corp falling 1.9 percent to C$5.77 after saying it would spend more than $1 billion to expand two gold mines.

FED WATCH: Investors are looking ahead to this week's Fed policy meeting for indications on the timing of the next rate hike and when the Fed might start shrinking its multitrillion-dollar stockpile of bonds.

In Europe, the eye-catching move was a sharp slide in Portuguese yields - and rise in prices - after the country regained an investment grade rating after 5-1/2 years. India's Sensex gained 0.6 percent to 32,472.62.

Canada's benchmark stock index notched a gain of more than 1 percent last week.



Like this

Latest


19 September 2017
'The Handmaid's Tale,' politics and 'SNL' dominate the Emmys
Voters in the Academy of Television Arts & Sciences crowned HBO's " Veep " the best comedy for the third year in a row. Similarly, the " Black Mirror " episode recognized as best TV movie , "San Junipero", focused on a lesbian love story.

19 September 2017
Mobile to bump monthly unlimited throttling limit to 50GB (from 32GB)
T-Mobile has such a cap in place which used to be 32GB, which we reckon for most users is more than enough. After all, T-Mobile has made new perks and promotions only eligible to ONE customers in hopes of this.

19 September 2017
Canadians impacted by Equifax data breach
Earlier this week, Equifax put the blame for the breach on a web server vulnerability in its Apache Struts open-source software. Equifax discovered the unauthorized access on July 29 of this year and acted immediately to stop the intrusion, it said.

19 September 2017
Action Launcher 28 arrives with full Adaptive Icon support
When it comes to Action Launcher, the new update will bring some of the best features of Android Oreo to those with older devices. Most older devices are not supported because the new operating system would likely just be too much for the older devices to run.

19 September 2017
Students turn cancer fundraiser into 'rape' joke at HS football game
A picture of the boys, with blurred faces, was shared on the Facebook page Anderson 5 Citizens for Quality Education . While another one wrote, "Wow. beyond unacceptable.

19 September 2017
Zinedine Zidane confirms Real Madrid contract renewal
He showed his importance to the side a week ago in the Champions League with two goals against APOEL Nicosia and will go straight back into the side for Wednesday's clash.

19 September 2017
Federal Reserve Expected to Hold US Interest Rates Steady
S&P 500 Index futures were down less than 0.1 percent after the underlying measure rose 0.2 percent to a fresh record on Monday. Baker Hughes on Friday reported that the number of active US oil rigs fell for a second week in a row, by 7 to 749 rigs.

19 September 2017
Amazon's 'frequently bought together' section suggests materials to build a bomb
Whilst numerous ingredients are innocent on their own, together they can be used to create explosives or devices. It added that it will work closely with authorities, should they need assistance during investigations.

19 September 2017
Hamas tunnel collapses in Gaza, third death in days
Facing those conditions, Hamas has turned to Egypt for assistance, particularly involving fuel to produce power. As a result, Israel has for month been building a deep underground wall at its borders with Gaza.(ANSAmed).

19 September 2017
Jacksonville hospital calls photos of newborns 'outrageous, unnacceptable'
It's outrageous, unacceptable, incredibly unprofessional, and can not be tolerated", the hospital said . Naval Hospital Jacksonville's Commanding Officer sends: "We are aware of a video / photo posted online.



Recommended