Wall Street Posted Modest Gains, The Dollar Pulled Back

World Stock Markets

On Wednesday, Wall Street posted modest gains after the Fed held policy steady as expected and underscored solid U.S. economic growth as well as a strengthening labour market, while downplaying the impact of recent hurricanes. 

Investors took that as a sign the U.S. central bank is on track to resume raising rates next month, with federal fund futures putting the odds of a December rate hike at about 98 percent, according to CME Group’s FedWatch program. 

In addition to the Fed’s encouraging assessment, the ADP National Employment Report showed that private employers hired 235,000 workers in October, the most in seven months. 

On Friday, the Labor Department’s nonfarm payrolls report is expected to show growth of 303,000 jobs in October, compared to a drop of 40,000 the month before. Total non-farm employment is expected to have increased by 312,000, according to economists polled by Reuters. 

U.S. Treasury yields fell further on Wednesday and the yield curve was its flattest since 2007 after the Treasury Department said it would keep auction sizes steady in the coming months, despite the Fed’s plan to reduce its bond holdings. 

Benchmark 10-year note yields US10YT=RR were at 2.359 percent in Asian trading, compared to their U.S. close of 2.376 percent on Wednesday, when they dipped as low as 2.349 percent.

The dollar index, which tracks the greenback against a basket of six major rivals, slipped 0.3 percent to 94.533 .DXY 

The dollar pulled back 0.3 percent against the yen to 113.89 JPY=, moving away from its more than three-month high of 114.45 yen touched last Friday. 

The euro was 0.3 percent higher at $1.1655 EUR=, remaining about its three-month low of $1.1574 touched on Friday, a day after the ECB said it will extend its bond purchases into September 2018.

Crude oil futures steadied, with Brent crude LCOc1 up 7 cents at $60.56 per barrel and U.S. crude CLc1 down 1 cent at $54.29.

While oil settled lower on Wednesday after weekly U.S. government inventory data showed the latest crude stock draw was not as big as an industry trade group had reported, both Brent and U.S. crude futures remain near their highest levels since July 2015 as lower global supply pushed markets higher