NEW YORK/LONDON :MSCI’S global equities gauge was barely up in choppy trading on Monday while U.S. Treasury yields dipped as investors awaited testimony from Federal Reserve Chair Jerome Powell, key inflation data and the corporate earnings season kick-off.
In foreign exchange markets, the euro gave back some of its gains after earlier hitting a multi-week high against the dollar following France’s election surprise.
Investors were waiting to listen to Powell’s comments in Congress on both Tuesday and Wednesday for more clarity on the prospects for interest rate cuts by the U.S. central bank.
They were also waiting for the closely monitored U.S. consumer price report, which is due on Thursday. June’s inflation rate is expected to slow to 3.1 per cent year-over-year, from 3.3 per cent in May, and the core measure is estimated by economists to stay steady at 3.4 per cent.
The week will end with the kick-off of the second-quarter earnings season with reports from major U.S. banks Citigroup, JP Morgan and Well Fargo on Friday.
“Investors are positioning as they expect a continuation of this rally for the rest of the year,” said Bruce Zaro, managing director at Granite Wealth Management in Plymouth, Massachusetts.
Investors are also looking for “a continuation of Powell’s recent dovish comments” when he speaks to Congress, Zaro said.
Traders have increased their bets that the Fed will first cut rates in September, according to CME Group’s FedWatch tool, which shows a 73.6 per cent probability for a September cut, up from 72.2 per cent on Friday and 59.8 per cent a week ago.
On Wall Street, indexes were a mixed bag. At 2:56 p.m. (1856 GMT) the Dow Jones Industrial Average was down 41.30 points, or 0.10 per cent, at 39,334.57, the S&P 500 gained 2.80 points, or 0.05 per cent, to 5,570.00 and the Nasdaq Composite gained 39.76 points, or 0.21 per cent, to 18,392.52.
On Friday the S&P had notched its third record close in a row. An advance of the tech-heavy Nasdaq on Monday would mark its fifth straight record close.
After four closing record’s in a row, MSCI’s gauge of stocks across the globe rose 0.02 points to 817.61. In Europe, the STOXX 600 index earlier closed down 0.03 per cent.
On the currencies side, the euro eased slightly against the dollar after earlier touching its highest level since June 12. In France, a leftist alliance unexpectedly took the top spot in Sunday’s parliamentary runoff election, delivering a setback to Marine Le Pen’s nationalist, euroskeptic National Rally party.
The weaker-than-expected showing for the far right was something of a relief for investors, though they have concerns the left’s plans could unwind many of President Emmanuel Macron’s pro-market reforms.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, gained 0.05 per cent at 105.00.
The euro was down 0.11 per cent at $1.0824. And against the Japanese yen, the dollar strengthened 0.06 per cent to 160.81.
In Treasuries, U.S. 10-year yields ticked higher after falling in the last three sessions with a focus on Powell’s appearance before Congress and inflation data later in the week.
The yield on benchmark U.S. 10-year notes was flat at 4.273 per cent, from 4.273 per cent late on Friday while the 30-year bond yield fell 0.6 basis points to 4.4628 per cent.
The 2-year note yield, which typically moves in step with interest rate expectations, rose 2.1 basis points to 4.6202 per cent, from 4.599 per cent late on Friday.
In commodity markets, oil futures settled lower as Hurricane Beryl shut U.S. refineries and ports along the Gulf of Mexico and as hopes for a ceasefire deal in Gaza appeared to reduce worries about global crude supply disruptions.
U.S. crude settled down 1 per cent, or 83 cents, at $82.33 a barrel and Brent finished at $85.75 per barrel, down 0.9 per cent or 79 cents on the day.
In precious metals, gold prices slipped as investors booked profits after Friday’s soft U.S. jobs data pushed prices to a more than one-month high on hopes the Fed would begin cutting interest rates in September.
Spot gold lost 1.48 per cent to $2,356.28 an ounce. U.S. gold futures fell 1.49 per cent to $2,352.90 an ounce.
From: channelnewsasia
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