Publicado: Sáb, Julio 13, 2019
Financiera | Por Marilu Caballero

Door open to Fed rate cut, chair says

Door open to Fed rate cut, chair says

Consumer prices rose 0.1 percent month-on-month, while 12-month inflation excluding volatile energy and oil prices, added a tenth of a percentage point to 2.1 percent.

In his testimony to Congress, Powell pointed to "broad" global weakness that was clouding the USA economic outlook amid uncertainty about the fallout from the Trump administration's trade conflict with China and other nations.

Gold prices inched higher on Friday as investors shrugged off concerns that stronger-than-expected consumer inflation in the United States could influence the USA central bank's decision on aggressive monetary policy easing. Shares of American, United Airlines Holdings and Southwest Airlines Co rose between 0.5% and 1.3%.

Wall Street hit new heights Wednesday, with the S&P 500 breaking the fabled 3,000 points mark for the first time (albeit briefly) while the two other main indices posted new highs. When asked whether illegal immigration lowers USA wages, Powell said that extensive research on the subject "has not reached a clear conclusion".

Powell was asked at the hearing by Carolyn Maloney, Democratic representative from the state of NY, if the Fed considers a half-percentage-point lowering of the benchmark interest rate during the July 30-31 FOMC meeting.

Although investors continue to disagree on how much the Fed will cut ratesopinions vary on whether the central bank will slash by a quarter of a percentage point or half of oneseveral said Mr. Powell's comments all but guarantee at least one rate cut as soon as this month.

Traders have priced in a 100 percent likelihood of a Fed rate cut in July, according to the FedWatch tool from CME Group.

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On the currency markets, the dollar index slumped 0.13 percent to 96.97.DXY, with the greenback easing 0.41 percent against the yen to 108.01.

"A rate cut in July is now all but certain", said James McCann, senior global economist at Aberdeen Standard Investments.

Meanwhile, the S&P/ASX 200 index edged tad 0.20 percent higher to 6,643.50 by 04:35GMT, while at 05:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 44.80 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). It was still some distance away from a six-month trough of 106.780 set on June 25.

The strongest sectors were industry, up 0.71 per cent, and finance, with a gain of 0.60 per cent.

In a sign of the bond market rally that has driven yields sharply lower, Germany yesterday sold 10-year bunds at a yield of minus 0.26pc and without a coupon.

U.S. oil futures have surged above $60 a barrel on concerns that Tropical Storm Barry could derail crude production in the Gulf of Mexico.

A man counts US dollars in Tehran, Iran July 7, 2019. That allayed investors' concerns that unexpectedly strong data reported Friday might give the Fed reason to hold interest rates.

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