Dollar down but stocks up in Asia

Dollar down but stocks up in Asia

Stocks that had fallen the most during the six-week slump in American equities led gains after Jerome Powell said rates are "just below" the range of a neutral policy, potentially removing one of the biggest overhangs.

The S&P 500 Index gained 2.3 percent as of 4 p.m.

In the meantime, "China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries".

USA stocks had opened lower amid jitters over U.S.

Trade also remained in focus, carmaker shares were under pressure after President Donald Trump threatened tariffs and renewed his haranguing of General Motors for closing US plants. The president has even gone so far as to call the Fed's rate hikes "loco" and the "single biggest threat" to the economy.

FOMC Chairman Powell says policy rate is just below estimates of neutral. "Not even a little bit", the president said. "That being said, given the headwinds out there I can't see it being sustained", said Gary Waite, portfolio manager at Walker Crips in London.

US consumer spending rose 0.6 percent in October after a downwardly revised 0.2 percent advance, beating market consensus, said the Commerce Department.

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Uncertainty over global trade as well as Brexit and Italy's conflict with the European Union had supported the U.S. dollar, but the dollar index dipped 0.53 percent after Powell's comments. Following an overnight 0.6 percent slide, it was flat around 96.8 against a basket of currencies. Earlier this month that contract's implied yield was a full quarter point higher at 2.95 percent, indicating that investors have now cut a full Fed rate hike from their expectations for the central bank's policy trajectory. "If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent", the statement added. A bond auction enjoyed much better buying interest than at last week's deal targeting retail investors as the government has shown signs it could compromise with the European Union on its budget deficit target.

The 30-year bond last fell 17/32 in price to yield 3.3484 percent, from 3.32 percent.

Italy's yield spread over Germany - effectively the premium investors require to hold Italian risk - tightened to 290 bps.

Spot gold was down 0.1 per cent at $1,213.41 per ounce at 1230GMT, having dipped to its lowest level since Nov 15 at $1,211.36 in the previous session.

In commodities, oil prices rose after sources said Russian Federation had accepted the need for cuts in production together with OPEC. It has slumped 21 percent this month, during which it fell to a 13-month trough of US$58.41.

Trump also blamed the Fed for the layoffs at General Motors and the stock market's recent wobbles. Salesforce.com surged 10.3 percent. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy.

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