Published: Sun, June 18, 2017
Markets | By Noel Gibbs

US Fed interest rate hikes keep coming

US Fed interest rate hikes keep coming

In remarks on Wednesday, Yellen called an emerging debate over raising global inflation targets "one of the most important questions facing monetary policy", as central bankers grapple with an economic rut in which low growth, low interest rates and weak price and wage increases reinforce each other. The S&P 500, Dow and Russell all closed at record highs Tuesday.

She also laid down plans to reduce the central bank's balance sheet in the second half of the year.

Government bonds on both sides of the Atlantic came under further pressure Thursday morning after three Bank of England officials dissented on the central bank's decision to keep its benchmark interest rate steady, arguing instead for an immediate rate increase.

On Thursday, the People's Bank of China (PBOC) pumped a net 90 billion yuan (13.25 billion USA dollars) into the financial system via reverse repos to ease a liquidity strain caused by tax payments and maturing reverse repos.

Stock indexes around the world fell on Thursday as technology shares resumed their recent sell-off, while the prospect of tighter monetary policy in the United States and Britain pushed up the dollar.

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The US Federal Reserve raised rates for the second time this year, bringing the key interest rate up to 1.25 percent. The common theme - then, as now - has been a slow growth economy with low inflation, according to Bankrate.

Exxon Mobil lost $1.18, or 1.4 percent, to $81.78 and Halliburton sank $1.30, or 2.8 percent, to $44.54. Short-term Treasuries trade at a very narrow spread over funding costs, with the two-year Treasury note yielding about 1.35 percent while Treasury collateral finances are near 1.20 percent.

One key game changer for China may have been a sharp reversal in market expectations for further depreciation in the yuan and capital outflows, after the PBOC moved aggressively in May to flush out speculative bets against the currency and allowed it to jump sharply against the dollar.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.16 percent from 2.13 percent. Brent crude, used to price worldwide oils, lost 8 cents to $46.92 a barrel in London.

The euro traded at $1.1210, after having hit a seven-month high of $1.1296. That was partly because investors bought them for their hefty dividend payments and partly because they were hoping for deals.

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For me to go out and win when it was the first time playing the course does a lot for my confidence and my career. Thomas capped his sensational round with an eagle after landing a 3-wood on the 18th green.

Those rate moves, while modest, were accompanied by regulatory crackdowns on riskier forms of financing and shadow banking, which have tightened credit conditions and led to China's bond curve inverting in recent months. Among other real estate companies, wireless communication tower company Crown Castle International gained 64 cents to $101.82.

BLOCK PARTY: Tax preparer H&R Block posted a bigger profit than analysts expected as well as slightly stronger sales. Symantec shed 68 cents, or 2.3 percent, to $28.41.

JOB POSTING: Biotech drugmaker Biogen fell and competitor Alexion Pharmaceuticals rose after the companies said Biogen Chief Financial Officer Paul Clancy will become Alexion's CFO at the end of July.

Matthew Harrison of Morgan Stanley said some investors may be anxious that Clancy's departure is a warning sign about an Alzheimer's disease drug Biogen is developing, but Harrison said there is no connection. Competitor Supervalu fell 30 cents, or 7.4 percent, to $3.76.

OVERSEAS: Germany's DAX advanced 0.3 percent and the CAC-40 in France lost 0.4 percent. The British FTSE 100 was little changed.

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As Fleetwood surprisingly wobbled and Thomas took plaudits, Brian Harman proved the merits of the quiet man. Harman was at 12-under 204 and still only had a one-shot lead, with Rickie Fowler two shots behind.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 per cent while Japan's Nikkei fell 0.4 per cent. The Hang Seng in Hong Kong dropped 1.0 percent to 25,621.26 and Shanghai's Composite index edged 0.1 percent lower to 3,128.21.

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