USA stocks open higher on Yellen speech, GDP data

USA stocks open higher on Yellen speech, GDP data photo USA stocks open higher on Yellen speech, GDP data

Global equity markets and the dollar rose on Friday to end a rocky week on an upbeat note after Federal Reserve Chair Janet Yellen said the USA central bank was on track to raise interest rates this year and US economic growth was revised upward again.

Asian stock markets were mostly lower Friday after the U.S. Federal Reserve chief reiterated that an interest rate hike is likely this year.

On the economic front, growth in the US economy was stronger in the second quarter than people had previously thought.

“Most [Federal Open Market Committee] participants, including myself, now anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter”, Yellen told an audience at the University of Massachusetts. South Korea’s Kospi fell 0.2 percent and Hong Kong’s Hang Seng inched up 0.4 percent. The company’s quarterly profit topped expectations on strong growth in China.

The overall economy expanded at an annual rate of 3.9 per cent in the April-June quarter, up from a previous estimate of 3.7 per cent, the Commerce Department reported Friday.

Traders had expected the Fed Chair’s speech to clarify the central bank’s stance on future rate hikes, after last week’s FOMC meeting had induced global volatility in markets and sparked worries about weakness in the world’s largest economy. That sparked declines in United States equities in five out of six sessions leading up to Ms Yellen’s speech.

In early USA trading, 10-year Treasuries were down 15/32 in price for a yield of 2.175 percent, up 5.5 basis points from late on Thursday.

All 10 major S&P sectors were higher, led by the financial index’s 1.28-per-cent gain. The dollar was up 0.42 percent against the yen at 120.610 yen.

Among emerging-markets currencies, the dollar finished the week at or near record highs against the Brazilian real, Mexican peso and Turkish lira.

Palladium, which is used more heavily in gasoline autocatalysts, is poised for its biggest weekly rise since March 2013 meanwhile, up 8 percent, on expectations that consumers could move away towards gasoline vehicles. Brent crude, a benchmark for many worldwide oils imported by US refineries, rose 42 cents to $48.17 a barrel.

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