• FED'S DUDLEY: HALTING TIGHTENING CYCLE NOW WOULD IMPERIL ECONOMY FED'S DUDLEY: "SO FAR SO GOOD" WITH U.S. RATE HIKE CYCLE
U.S. inflation is a bit low but should rebound alongside wages as the labor market continues to improve, an influential Federal Reserve official said on Monday, reinforcing the message that a recent patch of weak data is unlikely to derail plans to keep raising interest rates.
• With inflation stubbornly soft despite a 16-year low in the U.S. unemployment rate, the Federal Reserve should move only slowly to raise interest rates and trim its massive bond portfolio, Chicago Fed President Charles Evans said Monday.
• The dollar gained on Monday as an influential U.S. Federal Reserve official expressed confidence that rising wages would help revive domestic inflation, which has shown signs of softening recently.
The yen fell to two-week lows against the greenback and the euro after officials of the Bank of Japan at a meeting on Friday downplayed the likelihood that the bank would begin to roll back emergency stimulus to support the economy.
The dollar index .DXY, which gauges the dollar against six other currencies, was up 0.4 percent at 97.537.
The euro was down 0.4 percent versus the greenback, to $1.1147 EUR=, while against the yen the dollar increased 0.5 percent, at 111.43 yen JPY=.
• Traders raised their outlook on a rate hike by the Fed's Dec. 12-13 policy meeting to 47 percent from 41 percent late on Friday FFZ7 FFF8, CME Group's FedWatch tool showed.
• Oil prices fell about 1 percent on Monday to a seven-month low as market players saw more signs that rising crude production in the United States, Libya and Nigeria undercut OPEC-led efforts to support the market with output curbs.
Brent LCOc1 futures for August fell 46 cents, or 1 percent, to settle at $46.91 a barrel, their lowest since Nov. 29, the day before the Organization of the Petroleum Exporting Countries agreed to cut output for the first six months of 2017.
U.S. West Texas Intermediate crude CLc1 futures for July dropped 54 cents, or 1.2 percent, to settle at $44.20 per barrel, the lowest close since Nov. 14. The July contract will expire on Tuesday, and August will become the front month.
Both benchmarks are down more than 15 percent since late May, when producers led by OPEC extended by nine months their pledge to cut output by 1.8 million barrels per day (bpd).
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