Dollar steady, yields, stocks rise before Yellen speech
NEW YORK (Reuters) – World stocks and US Treasury yields rose on Monday ahead of an impending speech by Federal Reserve Chair Janet Yellen on monetary policy, while the US dollar steadied against a basket of key currencies, stabilizing above its lowest in more than three weeks.
A gauge of global equity markets ticked higher, lifted by energy stocks, as Brent crude-oil prices jumped to a fresh seven-month high following Friday’s sharp slide in the dollar.
The greenback, which suffered its biggest one-day drop against a basket of major currencies in four months on Friday after a poor payrolls report, was last down 0.02 percent, at 94.007.
Traders awaited clues on the timing of a Fed interest-rate hike from Yellen.
World equity markets were higher, and the MSCI’s all-country world equity index was up 0.57%, on pace for its third session of gains.
On Wall Street, the Dow Jones Industrial Average was up 99.44 points, or 0.56%, at 17,906.5 in early afternoon trading, the S&P 500 was up 9.5 points, or 0.45%, at 2,108.63, and the Nasdaq Composite added 19.03 points, or 0.39%, at 4,961.55.
Europe’s broad FTSEurofirst 300 index was up 0.51%, at 1,346.36, bolstered by gains in major mining and oil company shares, including Anglo American, Rio Tinto and BHP Billiton.
In the US Treasury market, yields rose as investors evaluated whether the weak jobs report for May would make it less likely for the Fed to raise rates in the coming months. Higher rates could curb spending and investment by individuals and companies, possibly hurting economic growth.
Rising yields on Monday likely reflected stronger risk sentiment as stocks gained, rather than expectations that Yellen would strike a more hawkish tone, said Thomas Simons, a money-market economist at Jefferies in New York.
Benchmark 10-year notes fell 6/32 in price to yield 1.725%, up from a two-month low of 1.697% on Friday.
Brent crude-oil prices rose above $50 a barrel to their highest since early November, lifted by Friday’s dollar weakness that could spur demand just as attacks on Nigerian oil infrastructure tightened supplies.
A weaker dollar supports fuel demand in the rest of the world as it makes dollar-traded oil imports cheaper.
Brent crude was last up 2.2%, at $50.75 a barrel. US crude was last up 2.5%, at $49.83 per barrel.