Gold Holds Decline as Investors Look for Further Clues on Rates

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Gold held its drop and headed for a fifth straight quarterly loss on prospects for a rise in U.S. interest rates this year as Federal Reserve policy makers honed their message on the outlook for borrowing costs.

Bullion for immediate delivery traded at $1,146.80 an ounce at 8:50 a.m. in Singapore from $1,146.20 on Friday, when it closed 0.7 percent lower, according to Bloomberg generic pricing.

Gold lost 5.7 percent over the past year as the Fed geared up to raise rates for the first time in almost a decade. St Louis Fed chief James Bullard floated on Friday the possibility of an increase as soon as next month after Chair Janet Yellen said she saw a case for tightening policy in 2015. Higher rates curb the appeal of the metal, which doesn’t pay interest or give returns like competing assets such as bonds and equities.

Odds on a move by the Fed in October are at just 18 percent, while there’s a 43 percent chance for a December move. Monthly U.S. payrolls data due this week may give further clues on the strength in the labor market.

Source: Bloomberg

Dollar Holds Gain as Focus Returns to Signs of Economic Growth

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The dollar held gains from its best week since July as investors look for further signs that the U.S. economy is strong enough for the Federal Reserve to raise interest rates by the end of this year.

The greenback advanced against all of its 16 major counterparts last week after a report on Friday showed the world’s largest economy expanded more than previously forecast in the second quarter and Fed Chair Janet Yellen said the central bank is on track to increase rates by December. The U.S. government will release August figures for personal spending and prices on Monday before announcing payrolls for this month on Oct. 2.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, was little changed at 1,214.29 as of 9:01 a.m. in Tokyo, after completing a 1 percent weekly advance on Friday, the biggest since July 17. The gauge has climbed 2.9 percent this quarter.

Central bank officials scheduled to speak this week include New York Fed President William C. Dudley, San Francisco Fed President John Williams and Yellen.

Source: Bloomberg

Asian Stocks Swing Before China Data; Japanese Shares Retreat

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Asian stocks fluctuated, with the regional benchmark index on course for its worst quarter in four years, as investors awaited data on Chinese industrial profits. Shares in Japan slid.

The MSCI Asia Pacific Index added less than 0.1 percent to 125.08 as of 9:04 a.m. in Tokyo after slipping as much as 0.1 percent. The regional gauge has slumped about 15 percent since the end of June, heading for its worst quarter since 2011, as the Federal Reserve prepares to raise interest rates with financial markets rattled by concern over the depth of China’s economic slowdown. Markets in Hong Kong, Taiwan and South Korea are closed for holidays Monday, while mainland China will be shut from Thursday for a week-long break.

E-mini futures on the Standard & Poor’s 500 Index dropped 0.4 percent. A 2.7 percent slump in health-care stocks left the U.S. benchmark index down 0.1 percent on Friday.

U.S. House Speaker John Boehner will resign from Congress at the end of October, following clashes with conservative members of his Republican conference. For some traders, the move reduces the likelihood of a government shutdown as soon as October, while raising the specter of a stalemate later in 2015.

Source: Bloomberg

Japan Stocks Drop as Over 1,000 Topix Members Trade Ex-Dividend

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Japan’s stocks fell, after the Topix index capped its sixth weekly decline in seven weeks, as more than half the companies in the measure traded without the right to receive the next dividend.

The Topix slipped 0.5 percent to 1,446.97 as of 9:01 a.m. in Tokyo, while the Nikkei 225 Stock Average lost 0.4 percent to 17,808.47. More than 1,000 Topix members are trading ex-dividend Monday, equating to a 10.8 point drag on the measure, data compiled by Bloomberg show.

The yen strengthened 0.1 percent to 120.41 per dollar, after sliding 0.4 percent on Friday as Federal Reserve Chair Janet Yellen said the central bank remains on track to raise interest rates in 2015, bolstering the greenback.

E-mini futures on the Standard & Poor’s 500 Index lost 0.5 percent, after the underlying measure dropped less than 0.1 percent on Friday. Biotechnology stocks plunged into a bear market amid concerns over drug prices, while Nike Inc. soared after beating analysts’ profit estimates.

House Speaker John Boehner said he will resign from Congress at the end of October, following clashes with conservative members of his Republican conference. While that frees him to schedule a quick vote on a funding bill that will get enough support from Democrats to avoid a government shutdown on Oct. 1, it shifts the risk to December, when the short-term funding expires.

Source : Bloomberg

S&P 500 Closes Little Changed Amid Biotech Selloff, Nike Rally

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The Standard & Poor’s 500 Index closed little changed, with the benchmark declining for a second straight week as biotechnology stocks tumbled toward a bear market, thwarting a rally led by Nike Inc.

The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,931.51 at 4 p.m. in New York, after earlier rising as much as 1.1 percent. The Nasdaq Composite Index lost 1 percent, erasing a 1.1 percent climb, while the Dow Jones Industrial Average gained 0.7 percent, supported by Nike’s gains.

Equities were initially boosted after Federal Reserve Chair Janet Yellen said in a speech following the close of markets yesterday that the central bank is on course to raise interest rates this year. Yellen’s remarks bolstered confidence the economy is sturdy enough to handle higher borrowing costs. She acknowledged that economic “surprises” could lead policy makers to change that plan.

The Fed held its fire on a rate increase last Thursday, saying it’s considering spillover risks to the U.S. economy from turmoil in global markets. That sparked declines in U.S. equities in five out of six sessions prior to Yellen’s speech. The selloff was briefly interrupted on Monday when Fed officials said a 2015 increase is still warranted. Traders are split on whether it will happen, pricing in about a 44 percent chance of a hike in December and a roughly 52 percent probability of liftoff in January.

Further calming some of investors’ worries about the impact of an emerging-market downturn, data today showed the world’s largest economy expanded more than previously forecast in the second quarter. Growth was boosted by gains in consumer spending and construction. A separate report showed a final measure of consumer sentiment for September fell less than forecast, though it reached the lowest level in almost a year.

Source : Bloomberg