Stocks buoyed by tech bounce; Dudley remarks lift Treasury yields


In the meantime, global financial conditions remain highly accommodative, the Fed's latest move made sense, and we believe the USA economy will handle this policy transition quite well.

New York Federal Reserve President William Dudley reinforced expectations that the USA central bank will continue on its path of tightening monetary policy.

"This is actually a pretty good place to be" with unemployment at 4.3 percent and inflation at about 1.5 percent, Dudley told the North Country Chamber of Commerce in Plattsburg, New York. [GOL/ETF]"The Fed continued to signal one additional hike in 2017, but the market is only pricing in a 35 percent probability of a further 25 bps increase this year", said Standard Chartered in a note, referring to the U.S. Federal Reserve's statement last week. "With buying interest returning to technology shares in the US, it's likely for Japanese counterparts to attract investors, while higher yields should boost financial stocks".

The yield on 10-year Treasuries was little changed at 2.19 per cent, after rising four basis points Monday.

With little economic data due out on Monday, market-watchers will be on the lookout for any key statements made by two Fed presidents, just days after the central bank chose to raise rates for the second time this year.

USA crude fell 1.41 percent to $44.11 per barrel and Brent was last at $46.81, down 1.18 percent on the day.

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Last week the Federal Open Market Committee raised the fed funds rate to a range of 1 per cent to 1.25 per cent and reiterated that it saw one more hike this year while reaffirming plans to trim the size of its massively expanded balance sheet. The US dollar held gains as the yen weakened.

Most Asian currencies depreciated against the dollar, with the Indian rupee, Malaysian ringgit and the Chinese yuan edging 0.1 percent lower.

Meanwhile two other Fed policymakers, speaking at a conference on macroprudential policy in Amsterdam jointly organized by the Dutch and Swedish central banks, suggested they are concerned less about raising rates too fast or too high than about keeping them too low for too long. US gold futures rose 0.1 percent to $1,248.30.

While the dollar index shows relevant strength, the spot gold is looking to break some resistances according to analyst Wang Tao.

"Taiwan dollar swap rates are likely to stay around current levels".

The U.S. dollar strengthened against that backdrop, dulling the investment appeal for the precious metal. On Friday, the CFTC's Commitment of Traders report showed that leveraged funds (think hedge funds) are holding a net-long position in the Euro for the first time since 2014, and a break above 1.13 could push Euro to its largest annual gain against the United States dollars since 2007.