Confirmation of pending rate hike fails to dampen US markets
US markets made solid gains despite comments from the Federal Reserve regarding the likelihood of a rate rise in June, as well as a reinforcement of commentary on the need to address the Central Bank’s balance sheet.
There were also global factors that could have placed a drag on the index, notably Moody’s downgrade of China’s credit rating from Aa3 to A1. However, the fact that Asian markets quickly shrugged off the news provided a measured lead for other overseas markets.
In the US, the Dow gained 0.4% to close at 21,012 points. The NASDAQ delivered a similar proportionate increase, closing at 6163 points.
European markets were mixed with the FTSE 100 gaining 0.4% to close at 7514 points, while mainland European markets came off marginally.
That DAX fell 0.1%, closing at 12,642 points.
The Paris CAC 40 closed at 5341 points, representing a decline of 0.1%.
On the commodities front, oil continued to find support in early morning trading, hitting a high of US$51.88 per barrel, but gave up all of those gains plus some in afternoon trading as it closed at US$51.30 per barrel.
Iron ore was the biggest casualty overnight as it closed at US$60.52 per tonne, representing a fall of 2.4%.
After starting weaker, gold made a strong run in afternoon trading to finish up 0.4% at US$1261 per ounce.
Base metals suffered across-the-board declines with nickel being the worst hit as it came off 2.3% to close at US$4.11 per pound.
Copper fell approximately 0.5%, closing at US$2.56 per pound.
There were only marginal declines in zinc and lead with the commodities closing at US$1.18 per pound and US$0.93 per pound respectively.
The Australian dollar strengthened significantly against the US dollar, increasing from circa US$0.745 to push above the US$0.75 mark.
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