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GLOBAL MARKETS-Stocks dip, dollar advances in wake of Fed comments

Published 22/03/2016, 04:51 am
© Reuters.  GLOBAL MARKETS-Stocks dip, dollar advances in wake of Fed comments
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* Wall St little changed after five-week rally

* Sterling down; minister resignation raises split concerns

* Dollar edges up after falling last week on dovish Fed (Adds close of European markets)

By Chuck Mikolajczak

NEW YORK, March 21 (Reuters) - Global equity markets slipped on Monday as the dollar moved higher and U.S. Treasury yields rose on hawkish commentary from several Federal Reserve officials.

Richmond Fed President Jeffrey Lacker said U.S. inflation is was likely to accelerate in the coming years and move toward the Federal Reserve's 2 percent target, while San Francisco Fed President John Williams told Market News International he would advocate for another interest rate hike as early as the April meeting. addition, Atlanta Fed President Dennis Lockhart said the U.S. may be in line for a rate hike as soon as April, as last week's decision by the Fed to hold rates steady was more about ensuring that recent global financial volatility had settled down. Fed does a pretty good job of giving us too much information and sometimes that confuses a lot of people," said Art Hogan, chief market strategist at Wunderlich Securities in New York, noting investors should focus more on the central bank's official statement than those of individual members.

"You hear hawkish commentary from Lockhart and that is going to move things around a little bit."

The dollar .DXY rose 0.28 percent to 95.352 against a basket of major currencies. The greenback had fallen in the three prior weeks, a decline of 3.1 percent. currency fell last week when Fed policymakers revised down the number of times they expect to raise interest rates this year to two from four.

Benchmark 10-year notes US10YT=RR were last down 11/32 in price to yield 1.9102 percent, from 1.87 percent on Friday. stronger dollar weighed on European equities, with the pan-European FTSEurofirst stock index .FTEU3 closing down 0.25 percent to start a week shortened by the Easter break.

U.S. stocks were little changed as investors looked for fresh catalysts after a five-week rally that pushed the benchmark S&P 500 into positive territory for the year. Dow Jones industrial average .DJI rose 35.99 points, or 0.2 percent, to 17,638.29, the S&P 500 .SPX gained 2.19 points, or 0.11 percent, to 2,051.77 and the Nasdaq Composite .IXIC added 12.04 points, or 0.25 percent, to 4,807.68.

MSCI's index of world shares .MIWD00000PUS shed 0.11 percent.

Crude oil prices rose, with Brent LCOc1 last up 0.39 percent to $41.36 and WTI CLc1 up 1.57 percent at $40.06 a barrel, as data showed a drawdown at the Cushing, Oklahoma delivery hub for U.S. crude. Gains were curbed, however, by concerns U.S. oil drillers could ramp up output after a two-month rally in crude. XAU= fell 0.89 percent to $1,243.31 an ounce as the dollar advanced, its third straight decline, but the metal was underpinned by expectations that the ultra-low interest rate environment would persist on a global level. CMCU3 climbed 0.53 percent to $5,068.50 a tonne on expectations of stronger demand in top consumer China after a jump in imports of refined copper by the world's second-largest economy. GBP= fell 0.59 percent to $1.4392 as worries mounted over Prime Minister David Cameron's ability to keep his Conservative party together and keep Britain in the European Union after Iain Duncan Smith, a leading voice for the UK to exit the EU, resigned from the cabinet late on Friday.

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