© Reuters. FILE PHOTO: A pedestrian looks at an electronic board showing stock market indices for various countries outside a brokerage house in Tokyo, Japan, Feb. 26, 2016. REUTERS/Yuya Shino/File Photo
By Sinead Carew and Tom Wilson
NEW YORK/LONDON (Reuters) – Crude oil futures closed lower on Tuesday as investors looked to the Federal Reserve for guidance on an upward path in interest rates, while U.S. crude futures gained on the hope that China will loosen COVID-19 restrictions that stoked fears about the global economy.
The US Dollar was lower against the Japanese Yen, while the Dollar jumped as sentiment improved on hopes that China will ease lockdowns after health officials discussed accelerating COVID vaccinations for seniors.
US Treasury yields rose ahead of a public appearance by Fed Chairman Jerome Powell and a series of data to be released later in the week. A survey released on Tuesday showed that US consumer confidence fell further in November amid lingering concerns about rising living costs.
Richmond Fed President Thomas Barkin on Monday dismissed speculation that the US central bank would reverse course on interest rates relatively quickly next year in comments made late on Monday.
And after similar messages from other Fed officials on Monday, investors were cautiously awaiting Powell’s comments at a Brookings Institution event on Wednesday on the outlook for the US economy and job market. Earlier this month, Powell had dashed hopes of easing policy after a Fed meeting.
“Nobody is willing to buy before tomorrow with Powell talking. Everyone is nervous about what he’s going to say,” said Ron Saba, senior portfolio manager at Horizon Investments in Charlotte.
However, Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, previously said that weakening consumer confidence may have marginally helped to smooth Treasury yields, weaken the dollar and boost equities as investors saw it as “ammunition for the Fed to soften its hawkish impulse”. 🇧🇷
While the S&P 500 rose 3.07 points, or 0.01%, to close at 33,852.53, the S&P 500 lost 6.31 points, or 0.16%, to close at 3,957.63.
The drop fell 65.72 points, or 0.59%, to 10,983.78, as pressure from tech industry heavyweight Apple (NASDAQ:), which makes its iPhones in China and has been hit by COVID-related protests there.
The MSCI stock indicator worldwide gained 0.01%.
US Treasury yields rose in choppy trading as traders waited for upcoming data including third-quarter US gross domestic product, Chicago manufacturing numbers, factory activity based on the Institute for Supply Management and payrolls. non-agricultural items for November due on Friday.
Yields on the 10-year benchmark notes rose 5 basis points to 3.752% from 3.702% on Monday. The yield on the 30-year bond rose 5.6 basis points to 3.8049%.
“It will be a busy second half of the week with all the data we expect. But the main focus will be on inflation and jobs,” said Subadra Rajappa, head of US rate strategy, at Société Générale (OTC: ) in New York.
In currencies, the rise was up 0.188%, with the euro falling 0.11% to $1.0326.
The Japanese yen strengthened 0.19% against the dollar at 138.68 to the dollar, while the British pound traded at USD1.1946, down 0.10% on the day.
The Aussie was up 0.54% against the greenback after rising as much as 1.4%.
Oil prices rose on hopes of a relaxation of China’s tight COVID-19 controls, which fueled demand concerns, but concerns that OPEC+ would keep its output unchanged at its next meeting capped gains.
Five OPEC+ sources said OPEC+ was likely to keep oil production policy unchanged at its Sunday meeting, while two sources said a further production cut would also be considered. Neither, however, thought another cut was highly likely.
futures closed up 1.24% to settle at $78.20 a barrel, while ending at $83.03, down 0.2%.
Gold prices rose on the back of the dollar’s retreat and hopes for less aggressive US rate hikes going forward.
rose 0.5% to $1,749.39 an ounce. The US gained 0.45% to settle at $1,748.10 an ounce.