U.S. Treasury yields rose on Monday along with World stocks ahead of an important speech regarding monetary policy by Janet Yellen, Federal Reserve Chair. The U.S. dollar steadied on Monday. A variety of global equity markets rose, mostly due to energy stocks, as crude oil prices jumped to a high for 2016. This all following Friday’s sharp slide in the dollar.
The greenback suffered its biggest one-day drop against a basket of major currencies. Stock Traders awaited clues on the timing of a Fed interest rate hike from Yellen, who is scheduled to speak about the U.S. economy and monetary policy at an event in Philadelphia at 12:30 p.m. (1630 GMT). Last week Yellen just said a rate increase might be appropriate in the coming months if the economy and jobs market improve further. “After Friday’s data, markets are clearly interested in any change in her message from two Fridays ago,” ScotiaBank analysts wrote in a research note.
On Wall Street, the Dow Jones industrial average .DJI gained 99.44 points, or 0.56 percent, at 17,906.5, the S&P 500 .SPX hiked 9.5 points, or 0.45 percent, at 2,108.63 and the Nasdaq Composite .IXIC advanced 19.03 points, or 0.39 percent, at 4,961.55.
These higher rates could curb spending and investment by individuals and companies, possibly hurting economic growth. The rising yields on Monday likely reflected stronger risk sentiment as stocks gained, rather than expectations that Yellen will strike a more hawkish tone, said Thomas Simons, a money market economist at Jefferies in New York.
“It’s a general ‘risk-on’ tone a little bit, but I don’t think there’s a lot of conviction behind that because there are more people on ‘wait-and-see’ mode than are willing to stick their neck out,” he said.
On Monday, crude oil prices hit the $50 dollar mark for the first time since November 2015. Attacks on the Nigerian oil infrastructure tightened supplies. A weaker dollar supports fuel demand in the rest of the world as it makes dollar-traded oil imports cheaper.