Bond yields creep higher as markets wait for Fed signals

11 Juillet, 2019, 05:07 | Auteur: Auguste Feret
  • Bond yields creep higher as markets wait for Fed signals

World FX rates in 2019 * Fed's Powell says trade, global concerns weigh on US economy * Dollar hits session low vs yen, euro after Powell remarks * Markets expect 25 basis-point cut later this month (Adds analyst comments, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, July 10 (Reuters) - The dollar fell on Wednesday after Federal Reserve Chairman Jerome Powell struck a downbeat tone in congressional testimony, saying trade uncertainties and concerns about the global outlook continued to exert pressure on the USA economy. The yield on 10-year Treasuries fell to 2.05%, after climbing above 2.10% for the first time in a month.

"A rate cut in July is now all but certain", said James McCann, senior global economist at Aberdeen Standard Investments. Investors will also scour June minutes from the Fed's June meeting. The pound halted a drop to a two-year low as data showed the United Kingdom economy rebounded in May.

European Central Bank minutes are due on Thursday.

Japan's Nikkei had also finished lower and Chinese blue chips barely budged as data showed inflation remained subdued.

Shares of 3M fell almost 2.1 percent, as Canadian investment bank RBC Capital Markets downgraded the company's stock to "sector perform" from "outperform", due to "eroding" reputation of the USA conglomerate as a "defensive, high-quality industrial".

The S&P 500 Index rose 0.4% as of 10:30 a.m.

The Dow Jones Industrial Average .DJI rose 43.35 points, or 0.16%, to 26,826.84, the S&P 500 .SPX gained 7.23 points, or 0.24%, to 2,986.86 and the Nasdaq Composite .IXIC added 28.44 points, or 0.35%, to 8,170.16.

The Stoxx Europe 600 Index climbed 0.4%.

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MSCI's broadest index of world stocks was little changed after three days of losses. Australia's S&P/ASX 200 advanced 0.45%.

The euro increased 0.4% to US$1.1249, the biggest climb in more than two weeks.

Renewed strength in the dollar would be an extra worry for the British pound, which is stuck near a six-month low due to uncertainty over how Britain will avoid a messy no-deal exit from the European Union. Yields on two-year Treasuries rose to 1.917 per cent from their recent low of 1.696 per cent and Europe's benchmark yields up around five basis points.

Sterling was last quoted at $1.2455 after skidding to a new six-month low of $1.2439 on Tuesday, with Brexit jitters and growing expectations of a Bank of England rate cut adding to the currency's weakness.

The dollar also firmed to ¥108.96, while the euro faded to US$1.1204 (RM4.641) having been as high as US$1.1412 just a couple of weeks ago.

The dollar's gains took the shine off gold, which eased 0.3 percent to $1,393.14 per ounce.

Yields on short-dated U.S. Treasuries, which had ticked higher in recent sessions after stronger-than-expected employment data on Friday, fell on Powell's remarks.

Brent crude futures rose 67 cents to $64.83, while United States crude gained 83 cents to $58.66 a barrel.



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