LONDON: Fed rate hike bets for next month fell to 30% from about 50% a week earlier after weak US data, according to CME Group’s FedWatch tool on August 17.
The shift followed an unexpected drop in US retail sales in July. Consumer sentiment also weakened more than expected, while recent inflation readings remained soft, Reuters reported.
Global shares edged higher as investors reduced expectations for tighter monetary policy. Europe’s STOXX 600 rose 0.04%, while Nasdaq futures gained 0.5% and S&P futures advanced 0.2%.
The dollar fell to its lowest level since June. The euro reached a two-month high of USD 1.1595, while the Australian dollar climbed to USD 0.7105.
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US Treasury yields also eased. The two-year yield fell 2 basis points to 4.154%, while the 10-year yield slipped to 4.688%.
Gold rose 0.43% to USD 4,394 an ounce. Brent crude gained 1% to USD 89.42 per barrel as tensions in the Middle East continued to affect oil markets.
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There was a subdued reaction in the Korean won after U.S. President Donald Trump instructed the Pentagon to substantially reduce joint military exercises with the country, while South Korean markets were closed for a holiday.
Investors will next watch earnings from Home Depot, Target and Walmart. August S&P Purchasing Managers’ Indices will also offer a fresh reading on US business activity.
