Global stocks mixed ahead of Yellen testimony

Global stocks mixed ahead of Yellen testimony

Investors will also keep an eye out on a few US economic reports, with Friday's inflation data in the spotlight, for further clues on the timing of the next Fed rate hike. Shares in Shanghai were down 0.3%, but rose 0.6% in Tokyo while the Hang Seng index in Hong Kong added 1.5%.

Nevertheless, we believe that since global key rates will rise very gradually from extremely depressed levels, their adverse effect on gold will be limited, especially since inflation in the United States and elsewhere remains low, even though the Fed believes that the strength of the employment market will ultimately feed through to inflation.

There was caution ahead of Fed Chair Yellen's congressional testimony on Wednesday with expectations overall that she would maintain a confident tone and expect to continue the process of gradual policy normalisation.

Still, higher US Treasury supported the dollar.

Data on Monday showed exports from Germany, Europe's biggest economy, rose more strongly than expected in May.

"Unlike in recent years, where there was very patchy growth across the world, we are seeing a synchronized upswing in the global economy", said Alex Dryden, global market strategist at JP Morgan Asset Management.

Last month, the Fed has raised interest rates by 25 basis points to 1.25 percent. It ended 0.54 percent higher on Monday, taking the year-to-date gains to 12.7 percent.

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The Canadian dollar fell against its USA counterpart as oil prices fell and traders await an interest rate hike decision by the Bank of Canada on Wednesday.

The ICE Dollar Index, which measures the dollar against a basket of six currencies, was 0.1% higher, at 96.13.

"The dollar is enjoying an increased yield appeal relative to the Japanese yen", said Omer Esiner, chief market analyst at Commonwealth FX in Washington.

International Container Terminal Services was among the biggest gainers on the index, climbing as much as 2.6 percent, after signing an agreement with a dredging company to deepen the Congo River in Africa, a move that would realise cost savings for the terminal operator from 2018.

"After better-than-expected US jobs report last week, I think ... investors will wait for cues from the statement of chairwoman Janet Yellen to US Congress on Wednesday", IB Gimenez Securities Inc. research head Joylin Telagen said.

Of note were the special topics the Fed chose to address: education's impact on economic opportunities, the global productivity slowdown, liquidity in the corporate-bond market and monetary policy rules. The Kospi in South Korea climbed 0.6 percent to 2,396.00 while Australia's S&P ASX 200 edged 0.1 percent higher to 5,728.90.

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