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GLOBAL MARKETS-Dollar rises on Fed talk, energy weighs on stocks

Published 24/03/2016, 02:24 am
© Reuters.  GLOBAL MARKETS-Dollar rises on Fed talk, energy weighs on stocks
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* Dollar on track for strongest week in a month

* Stocks lower as energy sector weighs

* Sterling hit by Brexit concerns (Adds open of U.S. markets, changes byline, dateline; previous LONDON)

By Chuck Mikolajczak

NEW YORK, March 23 (Reuters) - Global equity markets fell and the dollar advanced on Wednesday as investors attempted to gauge the path of interest rates by the U.S. Federal Reserve after a series of hawkish comments by Fed officials this week.

The dollar .DXY was up 0.48 percent to 96.104 against a basket of major currencies as it moved towards its first weekly gain in four. week, the Fed cut in half the number of rate hikes it predicts for the rest of this year to two, weakening expectations for a move in either April or June.

But in the past two days, several officials have expressed views for more hikes regardless of the volatility that has been the hallmark of financial markets this year.

"The focus has been on all these Fed guys coming out, really in defiance of (Fed Chair) Janet Yellen," said Ken Polcari, Director of the NYSE floor division at O'Neil Securities in New York.

"The dollar is reacting because, if these guys are calling for a rate hike in April, then the dollar is going to move higher. If the dollar is going to move higher it is going to put pressure on everything else."

Philadelphia Fed President Patrick Harker, who said on Tuesday the Fed should consider another rate hike as early as next month, is scheduled to speak again at 1730 EDT (2130 GMT). Louis Fed President James Bullard, a voter on U.S. monetary policy this year, said on Bloomberg TV on Wednesday he would like to see further stabilization in inflation expectations. stronger dollar helped dampen demand for oil while a preliminary report from an industry group showed a higher-than-expected stock build rekindled worries of a glut. weakness in energy names also pushed helped push stocks lower in the U.S. and Europe. The STOXX Europe 600 oil and gas index .SXEP and the S&P energy index .SPNY were both off 1.2 percent, with the latter the worst performing of the 10 major S&P sectors.

The FTSEuroFirst 300 index .FTEU3 of leading shares was down 0.18 percent at 1,335.76. MSCI's index of world shares .MIWD00000PUS lost 0.57 percent.

The Dow Jones industrial average .DJI fell 26.26 points, or 0.15 percent, to 17,556.31, the S&P 500 .SPX lost 5.32 points, or 0.26 percent, to 2,044.48 and the Nasdaq Composite .IXIC dropped 31.22 points, or 0.65 percent, to 4,790.44.

Gold XAU= also weakened in the face of the stronger dollar, down 2.4 percent to $1,217.90 after hitting a low of $1,215.10, its lowest level since Feb. 26. pound slumped 0.56 percent to $1.4126, with rising concerns that the attacks in Brussels would bolster the campaign for a vote to leave the European Union in June's "Brexit" referendum.

It was back on the defensive against the dollar on Wednesday. Derivatives allowing investors to insure themselves against sharp moves in sterling exchange rates ahead of that vote reached their highest since 2010 elections. U.S. 10-year notes US10YT=RR were last up 4/32 in price to yield 1.921 percent, down from 1.94 percent on Tuesday. Global assets in 2015

http://link.reuters.com/dub25t Commodities performance

http://link.reuters.com/rac73w Currencies vs dollar

http://link.reuters.com/tak27s

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