Southeast Asia stocks cautious ahead of Yellen speech

Southeast Asian stock markets trod cautiously on Wednesday as strong US housing data released overnight increased the chances of an interest rate hike in the coming months, while oil prices slipped after a surprise jump in US inventories.

The focus remained on the global central bankers who will meet in the US mountain resort of Jackson Hole later this week, where Fed chair Janet Yellen will give a speech on Friday.

Markets are pricing in around a 21% chance of a hike in September, but a 50% chance of at least one hike by the end of the year, according to CME FedWatch.

Global benchmark Brent crude futures were down 74 cents at $49.22 a barrel at 3.09pm, after touching an intraday low of $49.07.

Nothing "emphatic" is happening in the market, said Vishnu Varathan, a senior economist with Mizuho Bank.

There is a bit of mixed trading happening in the region as some of them are following the US cues reinforced by Tokyo's rise, he said, adding that Yellen's comment was expected to be dovish.

Philippine shares closed down 0.9%, with consumer non-cyclicals leading the losses. Earlier in the day, the index fell as much as 1.3% to its lowest in over 6 weeks.

The market is going to trade sideways for the rest of the week on expectation that Yellen's speech could give clues about whether there would be an interest rate hike in September, said Grace Aller, an analyst with AP Securities in Manila.

JG Summit Holdings Inc lost 3.8% and Universal Robina Corp fell 2.6%.

Singapore shares ended 0.7% higher and posted their biggest single-day gain in two weeks. Financial stocks led the gains, with DBS Group Holdings Ltd rising 1.4% and United Overseas Bank Ltd adding 1.1%.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.4% as of 4.50pm.