Global Markets Mixed After Yellen’s Speech


Global shares were mixed on Wednesday’s trading as the US dollar traded around a one-month high in growing market hopes of an incoming major tax reform in the country as well as optimism regarding the possibility of another interest rate hike before the end of the year.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan logged a 0.1% gain after opening slightly weaker for the week. Asian shares were also shaky on Tuesday due to the geopolitical concerns between the United States and North Korea.

While China’s Shanghai Composite Index traded mostly higher on Wednesday, Japan’s Nikkei 225 was down by 0.31% to 20,267.05 with most Japanese stocks hitting a one and a half week low due to the Japanese yen losing its ground on Yellen’s comments. The Hang Seng index as well as the Shanghai Composite was higher during the last trading session at 0.06% and 0.776% respectively.

According to Federal Reserve chair Janet Yellen during her speech on Tuesday that the central bank might have been wrong regarding the inflation during the past ten years as well as their views regarding the jobs market. However, she reassured that the Fed might still consider another rate hike before the end of the year.

The S&P/ASX 200 lost its ground by 0.12% to 5,664.30 or down by around 6.7 points on Wednesday while South Korea’s Kospi index was down by 0.07% to 2,371.57.

The U.S. dollar then rallied to a one-month high after Yellen’s speech with the dollar index hitting 93.323 overnight against other rival currencies. The greenback also recovered against the Japanese yen. The yen rallied during the previous session due to the market reaction on North Korea’s statement regarding U.S. President Donald Trump reportedly declaring war against the other.

The U.S. market ended mostly lower on Tuesday’s session with the Dow Jones industrial average closing 0.05% down at 22,284.32.

The euro also suffered losses during the trading session and is close to hitting a one-month low due to the results of the polls in Germany during the weekend that showed the possibility of a new government being created.  European stocks hit a ten-week high during Wednesday’s session widely due to the gains in the stocks of Siemens AG and Alstom SA who announced that they will now be joining their rail operations together. The Stoxx Europe gained 0.5% to 384.97 during the day.

In London, the FTSE 100 index was up by 0.2% along with France’s CAC 40 index which gained 0.1%.

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