US Fed minutes show four hikes likely

Amazon is a key driver of the success of the S&P 500 and is key for the index’s future

Amazon is a key driver of the success of the S&P 500 and is key for the index’s futuremark lennihan AP

There are a fair number of Federal Reserve speakers on tap in the coming week, as well as the minutes of its last monetary policy meeting and investors may simply be covering some of their more excessive short-Dollar positions before these hit. The Nasdaq composite increased 38 points, or 0.5 percent, to 7,275.

It inched up 1.84 points, or 0.1 percent, to 1,531.84.

The Fed cited the strength of recent economic data, accommodative financial conditions and the impact of a major tax cut that took effect in January, which it said might deliver a larger-than-expected increase in near-term economic growth.

"If Chinese shares rise when trading resumes tomorrow, that could lift the region further". This would put upward pressure on interest rates.

The DXY index traded modestly higher this morning to 89.85.

Australian stocks were almost flat and South Korea's KOSPI gained 0.55 percent.

The euro edged down 0.21 percent to $1.231 as the dollar rose.

After inflation worries knocked the S&P 500 down more than 10 percent from its January 26 high, stocks had rebounded in recent sessions as yields on the 10-year US Treasury note had stabilized around the 2.9 percent mark.

Benchmark 10-year notes last fell 13/32 in price to yield 2.9408 percent, from 2.893 percent late on Tuesday.

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This comes as the government moves to a fresh round of selling Treasurys.

The dollar index, which measures the greenback against a basket of major currencies, was down 0.4 percent at 89.678 after touching 90.235, its highest since February 12.

Spot gold was 0.5 percent higher at $1,329.71 an ounce by 1530 GMT, off an earlier low of $1,320.61 but still down 1.8 percent this week.

The U.S. currency has been weighed down by a variety of factors this year, including concerns that Washington might pursue a weak dollar strategy and the perceived erosion of its yield advantage as other countries start to scale back their easy money strategies.

Confidence in the dollar has also been shaken by mounting worries over the USA budget deficit.

But the greenback managed to find bids once the dust began to settle after last week's tumble. Some members were anxious that the pace of economic growth could tighten the economy faster than expected, thereby accelerating inflation.

These events weren't captured in the Fed's minutes.

On top of it all, Quarles noted, the Trump administration's newly passed $1.5 trillion tax overhaul, along with other fiscal measures, "could help sustain the economy's momentum in part by increasing demand, and also possibly by boosting the potential capacity of the economy by encouraging investment and supporting labor force participation."Low productivity growth, caused in part by weak investment, is hampering long-term USA economic growth prospects and should be a critical focus for policymakers, Quarles said". Germany's DAX slipped 0.1 percent, while France's CAC 40 rose 0.2 percent and Britain's FTSE 100 added 0.5 percent.

At the meeting, Fed officials agreed to hold rates steady in a range of 1.25% to 1.5%. Nvidia lost 3 percent.

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