Another indecisive effort from the Fed chair sees investors shift focus to upcoming data releases. Futures markets are mixed, pointing to opening gains for Hong Kong and Japan but weakness in Australia, possibly due to falling gold and copper prices. The local reporting season dribbles to a close this week, raising expectations institutional investors may return to the market and break the Australia 200 index out of its narrow range.

While Yellen stated the case for tightening is stronger, she also made it clear that:

“….our decisions always depend on the degree to which incoming data continues to confirm the Committee’s outlook.”

This makes the release of non-farm payroll numbers this Friday and inflation data due mid-September crucial to the path of US interest rates. Comments from Fed president Fischer indicate a rate rise as early as September 22 is possible.

A strengthening USD is knocking commodities around, with a sell-off in gold echoing selling in bond markets. While uncertainty clings to the timing of a rate hike, the positive tone of the US economy is reducing demand for safe havens and capital protection. The key question for Asia Pacific investors today is whether a stronger USD is stimulatory to regional economies.