Asian markets still weak as tensions over North Korea remain elevated
Asian stocks hovered near multi-week lows as tensions in the Korean peninsula remain elevated. The dollar climbed to a one-month high and bond yields rose on Wednesday as risks grew for a US interest rate hike in December
- The dollar climbed to a one-month high and bond yields rose on Wednesday as risks grew for a US interest rate hike in December
- Asian stocks hovered near multi-week lows as tensions in the Korean peninsula remain elevated
- Yellen's speech warned it would be "imprudent" to keep policy on hold until inflation is back to 2%
The dollar climbed to a one-month high and bond yields rose on Wednesday as risks grew for a US interest rate hike in December, while Asian stocks hovered near multi-week lows as tensions in the Korean peninsula remain elevated.
Markets were put on notice by Federal Reserve Chair Janet Yellen who used a Tuesday speech to warn it would be "imprudent" to keep policy on hold until inflation is back to 2%. She said the US central bank "should also be wary of moving too gradually" on rates.
Atlanta Fed chair Raphael Bostin, too, talked up the prospect of a December rate hike.
"Fed chair Janet Yellen was the highlight though," said Chris Weston, Melbourne-based Chief Market Strategist, IG.
"Without going into the speech in any depth, the wash-up is the comments were very much aligned with the recent (Fed) statement, but throw further weight that a December hike is on the cards."
Investors lifted the probability of a rate hike in December to 78%, from 72% late last week.
That sent the dollar to its highest level since August 31 against a basket of currencies and was last holding at 92.966.
The market is now waiting to hear from U.S. President Donald Trump on his tax reform plans as he remains under pressure to produce a legislative victory with the collapse of the latest Republican push to repeal Obamacare.
Trump warned North Korea on Tuesday that any US 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 ballistic and nuclear weapons programme.
Even a softer yen could not stop Japan's Nikkei slipping 0.5 %, while Australia`s main index eased 0.1 %.
The tech sector gained 0.4 %, with Apple
The pan-European FTSEurofirst 300 index had ended flat at 1,509.63. Nestle
In currencies, the euro held at more than one-month lows at $1.1781
The yield on benchmark 10-year Treasury notes
The two-year yield
The advancing greenback pulled commodities priced in dollars lower. Spot gold
Crude oil prices popped up early Wednesday after the weekly API inventory report showed a 761,000 barrel build-up in crude inventories, which suggests downside risks to the consensus estimate of a 2.52 million barrel build in an official report due later in the day.
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