Wednesday Morning Briefing: Fed Rate Hike Bets Rise, All Eyes On Trump

Asian markets opened on a firm footing ahead of Donald Trump's address to the joint session of Congress, where the U.S. President is expected to outline his legislative agenda.

The dollar climbed as the odds of a rate hike by the Federal Reserve this month rose above 70 percent on Tuesday, before falling back to 52 percent, according to futures rates tracked by Bloomberg.

Rate Hike In Play

Federal Reserve Bank of San Francisco President John Williams said he expects an interest-rate increase to receive “serious consideration” when he and other U.S. central bankers gather on March 14-15 in Washington.

New York Fed President William Dudley told CNN International that the case for tightening had become “a lot more compelling” in recent months.

Investors will also be monitoring comments from Fed officials, including Chair Janet Yellen, who speaks at an event in Chicago at the end of the week.

Also Read: U.S. Economy Grew 1.9% in Quarter, Unchanged From Early Estimate

Trump In Focus

Beefing up immigration control, destroying the Islamic State and revamping the tax code are likely to be the main focus areas of Trump's first speech to the joint session of Congress.

“My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere with anyone,” Trump will say, according to excerpts released by the White House.

The S&P 500 Index declined 0.3 percent Monday, paring the best monthly gain since March to 3.7 percent. The Dow Jones Industrial Average broke its winning streak, falling for the first time in 13 days.

Also Read: Trump Presses Priorities on a Congress Seeking Clarity, Details

Oil Near $54

Oil prices hovered near $54 a barrel as the prospect of rising U.S. crude inventories offset the production cuts by Organisation of Petroleum Exporting Countries and other nations.

Brent crude for April settlement dropped 34 cents to $55.59 per barrel on the London-based ICE Futures Europe exchange while West Texas Intermediate for April delivery declined 3 cents at $53.98 a barrel on the New York Mercantile Exchange.

Muted Start?

The SGX Nifty Index rose 0.13 percent to 8,923 as of 7:05 a.m., indicating a weak start to the Indian markets.

Shares closed lower for a second straight session on Tuesday, dragged lower by Idea Cellular Ltd. after private equity firm Providence sold 3.33 percent stake in the company.

Shares of NHPC Ltd. will be in focus today. The government-owned company has made an offer to buy back equity shares for a total consideration of Rs 2,616 crore.

Also Read: At 7%, Third Quarter GDP Growth Defies Demonetisation Fears