AFP, Paris :
Stock markets across the world dipped Monday as investors tried to second-guess the US Federal Reserve on the timing of its next interest rate hike.
Tokyo, however, was the exception with stocks there soaring on a weaker yen.
In a much-scrutinized speech, Fed chief Janet Yellen on Friday hinted at a US interest rate rise by the end of the year.
Yellen said a pick-up in the world’s top economy and an improvement in the jobs market meant “the case for an increase in the federal funds rate has strengthened in recent months”.
She gave no timeframe during her speech at the annual Jackson Hole symposium of global central bankers, but Fed vice chairman Stanley Fischer later said September was a possibility.
“Markets are finding it difficult to interpret remarks by Janet Yellen and other Fed members on the future of interest rates,” economists at Saxo Banque in Paris said in a note.
But Stephen Innes, senior trader at OANDA, said that “after a week of guessing, Yellen left little to the imagination when she stated that the case for a Fed rate hike had strengthened”.
He added, however, that any decision would remain “very much data-dependent”.
This means that all eyes will be on Friday’s US jobs figures which, if strong, will clinch the case for an early rate hike, analysts said.
Stock markets across the world dipped Monday as investors tried to second-guess the US Federal Reserve on the timing of its next interest rate hike.
Tokyo, however, was the exception with stocks there soaring on a weaker yen.
In a much-scrutinized speech, Fed chief Janet Yellen on Friday hinted at a US interest rate rise by the end of the year.
Yellen said a pick-up in the world’s top economy and an improvement in the jobs market meant “the case for an increase in the federal funds rate has strengthened in recent months”.
She gave no timeframe during her speech at the annual Jackson Hole symposium of global central bankers, but Fed vice chairman Stanley Fischer later said September was a possibility.
“Markets are finding it difficult to interpret remarks by Janet Yellen and other Fed members on the future of interest rates,” economists at Saxo Banque in Paris said in a note.
But Stephen Innes, senior trader at OANDA, said that “after a week of guessing, Yellen left little to the imagination when she stated that the case for a Fed rate hike had strengthened”.
He added, however, that any decision would remain “very much data-dependent”.
This means that all eyes will be on Friday’s US jobs figures which, if strong, will clinch the case for an early rate hike, analysts said.
