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Shares slip, dollar creeps up as markets await Powell and Yellen

Economy Mar 23, 2021 05:40AM ET
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By Lawrence White and Alun John

LONDON/HONG KONG (Reuters) - Shares edged down, bond yields eased and the dollar crept up towards recent peaks on Tuesday with markets in a cautious mood ahead of Congressional testimony by Fed Chair Jerome Powell and Treasury Secretary Janet Yellen later in the day.

The STOXX index of 600 European shares was down 0.4%, while the benchmark 10-year German government bond yield dropped 1.9 basis points to -0.3290% as Monday's plunge in the Turkish lira and lingering concerns over coronavirus infection rates drove investors to safer assets.

The dollar firmed and S&P 500 futures were 0.28% lower, with markets turning their attention to an update from Powell. In remarks prepared for delivery to a congressional hearing on Tuesday morning, the Fed chief said the U.S. economic recovery had progressed "more quickly than generally expected".

"The FOMC last week laid out pretty clearly what the Fed's view is with regard to rates... the next thing that markets will focus on is maybe getting some details from Yellen with regard to further infrastructure investment," said Alex Wolf head of investment strategy for Asia at J.P. Morgan Private Bank, referring to a statement from the Federal Open Market Committee.

Graphic: U.S. Treasury yields and inflation expectations - https://fingfx.thomsonreuters.com/gfx/mkt/jbyvraexmpe/Pasted%20image%201616488404659.png

MIXED MOOD

A mixed bag of new Western sanctions on China, coronavirus concerns and Turkish tumult after President Tayyip Erdogan's shock sacking of the central bank chief at the weekend left investors awaiting a firmer signal.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.66%, hurt by a 0.95% fall in Chinese blue chips as a fresh wave of U.S. and European sanctions related to human rights abuses in Xinjiang hit.

The fresh sanctions on China prompted an immediate riposte from Beijing against the EU that appeared broader, including European lawmakers, diplomats, institutes and families.

Adding to market jitters were further worries over the efficacy of the AstraZeneca (NASDAQ:AZN) Plc vaccine developed with Oxford University after a U.S. health agency said the drugmaker may have included outdated information in its data.

Hong Kong's Hang Seng Index fell 1.62% and there was a tepid market debut for Baidu (NASDAQ:BIDU), which saw the Chinese tech giant's shares barely trade above their secondary listing price.

Japan's Nikkei fell 0.61%, but emerging markets in the region performed better.

Benchmark 10-year U.S. Treasury notes last yielded 1.6505%, down from 1.732% late on Friday.

The dollar gained slightly against a basket of six major currencies last trading at 92.019, having slipped 0.32% on Monday, while making advances against the kiwi, Aussie and sterling.

The New Zealand dollar hit a three-month low after the government introduced taxes to curb housing speculation, a move investors reckoned could allow the central bank to hold interest rates lower for longer with less risk of a property bubble.

Oil also dropped amid ample supply and concerns that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in fuel demand.

"Global travel is still looking like it could be a while away," said Matt Stanley, a fuel broker at Star Fuels in Dubai, adding that a second-half recovery in oil demand looked doubtful as lockdowns remain the order of the day.

U.S. West Texas Intermediate crude oil futures dropped 1.07% and Brent crude futures dropped by 1.24% to $63.90 per barrel.

Shares slip, dollar creeps up as markets await Powell and Yellen
 

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Comments (9)
Matt Kay
Matt Kay Mar 23, 2021 7:58AM ET
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yes, wait for boomers to tell you what is going to happen. Fraking boomers
President Xi Jinping
President Xi Jinping Mar 23, 2021 4:26AM ET
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China needs to be held accountable for substandard health practices such as allowing the sale and consumption of ill prepared diseased exotic foods in major transportation hubs that lead to more dangerous diseases every decade. These poor standards led to trillions of economic damage and millions dead. They must improve their standards.
Chris Sundo
Chris Sundo Mar 23, 2021 1:37AM ET
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There's no more value or reliability of financial or market related news. When ever I scan the news on this site there are multiple articles for the same topic, commodities or China, and they tend to contradict each other ..
Jo Doe
Jo Doe Mar 23, 2021 1:37AM ET
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Disagree. Some laptop companies in Taiex benefit from pandemic.
perplexed76 .
perplexed76 . Mar 23, 2021 1:37AM ET
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Jo Doe  but it looks like everybody benifited due to pandemic. Look at indexis
perplexed76 .
perplexed76 . Mar 23, 2021 1:06AM ET
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omg what a bad news, no wonder it overweighed hopes and made futures -0.2%
Pablo Blanc
Pablo Blanc Mar 23, 2021 12:47AM ET
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How many times people gonna post this fufu
Eudon Hickey
Eudon Hickey Mar 23, 2021 12:09AM ET
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You should know by now, Reuters are the same a WasingtonPost .....no facts, just gossip at the bus station
Edward Chong
Edward Chong Mar 23, 2021 12:09AM ET
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Haha at times its true. really reporting rubbish.
Ad Cline
Ad Cline Mar 23, 2021 12:09AM ET
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well hickey... with this post.we all know what fascist authoritarian dictatorship you work for. how's St Petersburg. get ready for more sanctions against your employer.
Ad Cline
Ad Cline Mar 23, 2021 12:09AM ET
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hickey.. do you understand that the fascist government of Russia is the enemy of the Russian people.
Eric Carpenter
Eric Carpenter Mar 22, 2021 11:56PM ET
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the china keep worrying bout that china virus
Fun Land
Fun Land Mar 22, 2021 11:56PM ET
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what china virus that you talk about? Have you taken your medicine yet?
Joel Schwartz
Joel Schwartz Mar 22, 2021 11:56PM ET
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US has been the largest global source of COVID cases for quite some time now...
Dave Jones
Dave Jones Mar 22, 2021 11:11PM ET
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Inflation is real. They are lying to you
Camaro Camero
Camaro Mar 22, 2021 11:11PM ET
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It sure is! Just look at grocery store prices. My favorite is how manufacturers are reducing product quantity by creative packaging. I bought some coffee and from the front the container looked normal and rounded, but the back was all convoluted to reduce contents. So when you pick it from the shelf you think you are buying what you always have for only a LITTLE more.
Đặng Vương
Đặng Vương Mar 22, 2021 10:44PM ET
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Will see Tech green tmr
 
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