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GLOBAL MARKETS-Dollar steadies after Fed comments, stocks flat

Published 05/04/2016, 01:52 am
Updated 05/04/2016, 02:00 am
© Reuters.  GLOBAL MARKETS-Dollar steadies after Fed comments, stocks flat
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* Oil recovers from 1-month low

* Dovish Rosengren expects earlier Fed hike than does market

* Metals prices fall on China demand concern

* Defensive plays lead European shares higher

* Wall St little changed (Adds open of U.S. markets, changes byline, dateline; previous LONDON)

By Chuck Mikolajczak

NEW YORK, April 4 (Reuters) - The dollar pulled off earlier lows on Monday in the wake of comments from a U.S. Federal Reserve official, keeping commodity prices under pressure while global equity markets were little changed.

A typically dovish U.S. central banker, Boston Fed President Eric Rosengren, said it was "surprising" that futures markets currently imply one or zero rate hikes this year, a prediction he said could prove "too pessimistic." moved the dollar .DXY up to a session high of 94.829 against a basket of major currencies. The greenback was last down slightly at 94.554. have been trying to reconcile conflicting statements from U.S. Federal Reserve officials in recent weeks since the central bank issues its policy statement on March 16.

Federal Reserve Chair Janet Yellen said last week the central bank would proceed cautiously in raising rates, in contrast to more hawkish comments from other Fed officials. The apparent lack of unison has left investors uncertain in an environment of mixed economic data.

"The Fed really for the first time has been sending kind of mixed signals about the pace of raising rates," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

"If the economy is good enough for them to raise rates that could be a good move for stocks, if they are just raising rates in anticipation of the economy picking up and it never does that is a pretty negative sign."

New orders for U.S. factory goods fell in February and business spending on capital goods was much weaker than initially thought, the latest indications that economic growth remained sluggish in the first quarter. Dow Jones industrial average .DJI fell 31.81 points, or 0.18 percent, to 17,760.94, the S&P 500 .SPX lost 5.5 points, or 0.27 percent, to 2,067.28 and the Nasdaq Composite .IXIC dropped 20.35 points, or 0.41 percent, to 4,894.19.

MSCI's index of world shares .MIWD00000PUS , edged up 0.09 percent, buyoed by gains in European stocks. The pan-European FTSEurofirst 300 share index .FTEU3 rose 0.47 percent, led higher by defensive stocks such as utilities and healthcare. move in the dollar kept pressure on oil, with Brent crude LCOc1 , down 0.7 percent at $38.41, although it recovered after dropping to $38.18, its lowest since March 4. U.S. crude CLc1 was off 0.4 percent at $36.65. have fallen from above $100 a barrel since mid-2014 on a supply glut, bottoming at $27.10 in late January. Brent topped $42.50 last month in anticipation of agreement among producers to freeze output.

Copper prices CMCU3 , which are also sensitive to the value of the dollar, hit a one-month low of $4,757.50 a tonne on concern about Chinese demand and was last down 1.5 percent at $4,761.

Gold XAU= fell for the second successive day, dropping about 0.3 percent to $1,218.40 an ounce. U.S. 10-year notes US10YT=RR were last up 5/32 in price to yield 1.774 percent, down from 1.791 percent Wednesday.

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