· Federal Reserve policymakers had a prolonged debate about the prospects of a pickup in inflation and slowing the path of future interest rate rises if it did not, according to the minutes of the U.S. central bank’s last policy meeting on Sept. 19-20 released on Wednesday.
Federal Reserve policymakers had a prolonged debate about the prospects of a pickup in inflation during their September meeting, but many policymakers still felt that another rate increase this year “was likely to be warranted.”
The readout of the meeting, at which the Fed announced it would begin this month to reduce its large bond portfolio mostly amassed following the financial crisis and unanimously voted to hold rates steady, also showed that officials remained mostly sanguine about the economic impact of recent hurricanes.
“Many participants expressed concern that the low inflation readings this year might reflect... the influence of developments that could prove more persistent, and it was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted,” the Fed said in the minutes.
As such several said that they would focus on incoming inflation data over the next few months when deciding on future interest rate moves.
· The dollar fell on Wednesday to a two-week low against a basket of currencies, as the U.S. Federal Reserve’s latest minutes hinted policy-makers are open to an interest rate increase in December despite concerns about weak inflation.
· Several Fed officials expressed they would like more inflation data in the next few months when deciding on future rate hikes.
That view within the Fed raised some doubts among traders that a third rate increase in 2017 would be a sure thing, though it has largely been priced into the futures market.
· Futures markets suggested traders saw an 88 percent chance the Fed would raise rates in December, little changed prior to the release of the latest Fed minutes, CME Group’s FedWatch program showed.
· Investors were also concerned U.S. President Donald Trump could hurt his tax reform plan by feuding with Senator Bob Corker, a fellow Republican whose vote Trump will probably need.
The dollar index, which measures the greenback against six currencies, lost nearly 0.4 percent to 92.937 after hitting its lowest since Sept. 26.
The euro reached a two-week peak at $1.1864. It was last at $1.1863, up 0.5 percent from Tuesday.
· A longer extension of the European Central Bank’s asset purchase program may be more beneficial when markets are calm, ECB Chief Economist Peter Praet said on Wednesday, just weeks before the ECB is due to decide whether to extend stimulus.
· The negotiations to leave the European Union are hurting the British economy by putting it under a "cloud of uncertainty," the U.K.'s finance minister said in parliament on Wednesday.
The U.K. "is fundamentally robust" and there are "some very positive things going on, with a strong outlook for the future," Philip Hammond said. But he added that the "cloud of uncertainty over current negotiations is acting as a temporary dampener."
· Japanese Prime Minister Shinzo Abe’s ruling bloc could come close to keeping its two-thirds “super” majority in an Oct. 22 lower house election, defying some predictions of substantial losses and solidifying his grip on power, a survey published by the Nikkei business daily on Wednesday showed.
Abe’s conservative Liberal Democratic Party (LDP) and its more dovish junior partner, the Komeito, are likely to secure more than 290 seats in the 465-seat chamber, the Nikkei said.
· Oil prices rose for the third day on Wednesday as OPEC forecast higher demand for 2018 and heightened tensions in Kurdistan supported prices.
Brent crude futures LCOc1 rose 33 cents, or 0.6 percent, to settle at $56.94 per barrel. Brent rose 2 percent the previous day.
U.S. West Texas Intermediate (WTI) crude futures CLc1 rose 38 cents, or 0.8 percent, to $51.30 a barrel.
· API said crude inventories rose 3.1 million barrels in the week to Oct. 6. Analysts had expected a draw of 2million barrels. The U.S. Department of Energy reports official data on Thursday.
Reference: Reuters, CNBC
Thai
Eng