U.S. Treasuries are set for their biggest monthly loss since June 2015 after a slew of hawkish rhetoric from Federal Reserve officials that’s revived the dollar and weighed on metals prices. Oil swung into a bull market in August and Chinese shares led gains in global equities.

Two-year Treasury yields climbed this month by the most since November as the probability of a September rate hike by the Fed almost doubled to 34 percent in the futures market. The Bloomberg Dollar Spot Index gained ground for the first time since May, while gold and copper prices are near their lowest levels of the quarter. Crude rebounded in August on optimism major producers will agree to freeze output, while better-than-expected earnings boosted equities in the U.S. and China.

The growing prospect of borrowing costs being raised in the U.S. comes as central banks in Europe and Japan stand prepared to add to unprecedented monetary stimulus that’s led to negative bond yields. Fed Vice Chairman Stanley Fischer said on Tuesday that any rate hike will be data dependent, having previously pointed to employment figures on Friday as being of key importance, and more light may be shed on the matter when regional Fed chiefs for Chicago, Boston and Minneapolis speak Wednesday.

“The Fed’s more upbeat mood and a summer of record highs on Wall Street have boosted the U.S. dollar’s yield appeal,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “Payrolls is certainly very important, though there are strong indications that seasonal factors will ensure the headline reading will not provide the Fed with the slam dunk it needs for a September hike.”

Canada and India are among countries reporting gross domestic product for the last quarter on Wednesday, while the euro area has unemployment and inflation figures due. U.S. Treasury Secretary Jacob Lew is scheduled to comment on what to expect at the Sept. 4-5 Group of 20 leaders’ summit in Hangzhou, China.

Bonds

The yield on two-year U.S. Treasuries, the notes most sensitive to the monetary policy outlook, climbed 14 basis points this month to 0.80 percent as of 2:32 p.m. Tokyo time. The spread versus 30-year rates is the narrowest since January 2008 and U.S. Treasuries on average have handed investors a 0.6 percent loss for August, Bloomberg data show.

“A December hike remains very likely, although a bumper payrolls on Friday would make September more live,” said Peter Jolly, the global head of markets research at National Australia Bank Ltd. in Sydney. “The yield curve almost always flattens when the Fed raises rates. Curve flattening has not finished.”

Currencies

The Bloomberg Dollar Spot Index declined 0.1 percent on Wednesday, trimming its monthly advance to 0.5 percent. Friday’s payrolls data is forecast to show the U.S. added 180,000 jobs this month and prices for Fed funds futures imply a 59 percent chance of an interest-rate increase this year.

The yen weakened 0.9 percent this month to 102.99 per dollar. South Africa’s rand slid more than 4 percent as a police summons for Finance Minister Pravin Gordhan heightened political risk in the country, while Norway’s krone led gains among the currencies of oil-exporting nations.

New Zealand’s dollar strengthened 0.4 percent on Wednesday, extending this month’s gain, as a report showed business confidence in the nation was at a 20-month high.

Commodities

Crude oil traded at $46.27 a barrel in New York before government data due Wednesday that’s forecast to show U.S. stockpiles increased by 1.3 million barrels last week. The price surged 11 percent for this month amid speculation informal talks among OPEC members in Algeria next month will result in an output freeze.

Gold was headed for a monthly loss of almost 3 percent as the prospect of a Fed rate hike dulls the allure of assets that don’t bear interest. Holdings in gold exchange-trade funds rose about 25 metric tons this month, the smallest gain in 2016.

Copper slid more than 6 percent in London since July on concern a glut is worsening. It rose 0.3 percent on Wednesday after Chilean miner Codelco halted one mine and faced the possibility of a strike at another, threatening disruptions from the world’s top supplier of the mined metal.

Corn was headed for a third monthly drop with prices touching $3.155 a bushel on Tuesday in Chicago, the lowest since 2009. The U.S. crop was rated 75 percent good-to-excellent as of Aug. 28, the highest since 1994, official figures show.

Stocks

The MSCI All Country World Index of shares was headed for a 0.5 percent monthly advance, after surging 4.2 percent in July. The S&P 500 Index is within 1 percent of an all-time high, the Stoxx Europe 600 Index is set to rise in August for the fifth month in six and the MSCI Asia Pacific Index is poised for a second monthly gain.

An index tracking the Hong Kong-listed shares of Chinese companies was headed for a 7 percent monthly jump, the best performance among 94 major equity benchmarks worldwide. The Hang Seng Index was set to climb more than 5 percent for the second month in a row, while BOC Hong Kong (Holdings) Ltd. surged as much as 5 percent on Wednesday alone after reporting increased earnings and a special dividend.

Trading in Hanjin Shipping Ltd.’s shares was suspended in Seoul on Wednesday after South Korea’s biggest container shipping line said it will file for receivership. The stock has tumbled 78 percent over the past year to a record low. A Tokyo-listed exchange-trade fund tracking Brazilian stocks was unchanged as the impeachment trial of suspended President Dilma Rousseff neared its end.

Futures on the S&P 500 were steady after a drop in Apple Inc. helped drag the U.S. gauge down 0.2 percent in the last session. The company was ordered to pay 13 billion euros ($14.5 billion) plus interest after the European Commission said Ireland illegally reduced its tax bill.

Source: Bloomberg