“While potential talks in Islamabad remain likely, rhetoric from Washington and Tehran continued to point to fragile and strained negotiations,” analysts from Westpac wrote in a research report.
Overnight, the S&P 500 was down 0.2 per cent on worries over whether the US-Iran ceasefire would hold, while the Nasdaq Composite snapped a 13-day winning streak, its longest in more than three decades.
Warsh’s confirmation hearing before the Senate panel is scheduled to begin at 10am EDT (10pm, Singapore time) on Tuesday, with his independence from the Trump White House expected to be a key focus. Warsh will say he is “committed to ensuring that the conduct of monetary policy remains strictly independent”, according to his prepared remarks, while economists say his attitudes towards the central bank’s quantitative easing program will also be critical.
“In the past, Warsh was a vocal critic of the Fed’s ‘bloated’ balance sheet, as he called it, and argued that it creates a distortionary impact on asset prices,” said Bansi Madhavani, senior economist at ANZ in London. “His preference for a smaller balance sheet is quite clear, but any guidance around what he thinks will be the optimal size, we think that will be relevant,” she said on a podcast.
The US dollar index, which measures the greenback’s strength against a basket of six currencies, held steady at 98.08, firmly in the middle of the range it has sat in during the past week.
The euro was fetching US$1.1782 and sterling traded at US$1.35225, both down a touch on the day. The risk-sensitive Australian dollar also eased 0.1 per cent to US$0.7171 in early trading.
The yield on the US 10-year Treasury bond was up 0.8 basis points at 4.256 per cent.
Bets on so-called dollar debasement languished. Gold was up 0.1 per cent at US$4,824.83 after a month of moving sideways. Cryptocurrencies fluctuated in the trading channel they have wallowed in since early February, with bitcoin down 0.3 per cent at US$76,072.61 and ether slipping 0.8 per cent to US$2,320.92.
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