Photographer: Burak Kara / Getty Images
Photographer: Burak Kara / Getty Images
Asian stocks are poised to start cautiously at the start of the week, while investors worry about rising bond yields and inflation as economic activity resumes. The Turkish lira fell after replacing the head of the central bank.
US equities futures fell. Futures fell in Japan and Australia and were higher in Hong Kong earlier. He The Turkish lira fell up to 15% in early Asian business after President Recep Tayyip Erdogan eliminated the central bank governor after a larger-than-expected rise in interest rates. The dollar advanced against most of the Group of 10 currencies.
The S&P 500 index fell on Friday. The financial sector weighed on the Dow Jones industrial average after the Federal Reserve allowed the capital breakdown of large banks to expire. The highly technological Nasdaq 100 bounced back from falling on Thursday. Oil fell after the worst week since October.
A heavy slate of the Treasury maturity auctions that have been heavily beaten recently will hold the bond market this week. Ten-year yields ended last week above 1.7%, at their highest levels in about 14 months.
Investors’ concerns about the possibility of higher interest rates dominate the equity and fixed income markets. Bond sales have boosted higher yields and fueled a rotation of growth toward value stocks, in the view that rising inflation may force the Fed to tighten monetary policy earlier than its current orientation suggests.
Fed Chairman Jerome Powell reiterated in a Wall Street Journal editorial that the central bank will provide aid to the economy “for as long as it takes”.
“Clearly, the market is skeptical that the Fed can keep interest rates at current levels for the next three years,” said senior economist Diana Mousina. multi-AMP Capital Investors Ltd. asset group said in a note. “We believe that nominal bond yields may still increase in the short term towards 2% and more due to inflation concerns. Markets are likely to be concerned that this measure will be permanent rather than temporary.
An exemption from the central bank that would allow lenders to charge treasuries and deposits without leaving additional capital to recoup losses will expire on March 31st. The regulator also said it will soon propose new changes to this additional leverage ratio, or SLR.
Meanwhile, the European Union is set block AstraZeneca Plc vaccine exports to the UK until the pharmacist fulfills its delivery obligations to the block. The pound was weaker.
Here are some key events to watch this week:
- Fed Chairman Powell arrives for the first time Monday at the BIS Innovation Summit, a virtual gathering of major central bankers. He speaks alongside Jens Weidmann of the Bundesbank about progress with the digital age. They are followed by Christine Lagarde of the ECB, Andrew Bailey of the BOE and the leaders of Sweden, Canada, Mexico and Brazil.
- Powell and Treasury Secretary Janet Yellen are expected to make their first joint appearance before the U.S. House Financial Services Committee to testify about the Fed and Treasury pandemic policies.
- EIA Crude Inventory Report Wednesday.
- On Friday, February, U.S. personal spending and income data comes after $ 600 stimulus checks, but before the final round of $ 1,400 payments began to hit U.S. bank accounts.
These are some of the main movements in the financial markets:
Stocks
- Futures S&P 500 fell 0.3% at 7:15 a.m. in Tokyo. Nasdaq 100 futures fell 0.4%.
- Futures Nikkei 225 fell 0.6% earlier.
- Australian S & P / ASX 200 index futures fell 0.2% earlier.
- Hang Seng index futures rose 0.4% earlier.
Coins
- The yen rose 0.1% to 108.83 per dollar.
- The Spot Bloomberg Dollar Index is up 0.1%.
- The euro fell 0.1% to $ 1,1887.
- The Australian dollar fell 0.2% to 77.26 US cents.
Good
- The 10-year Treasury yield rose one basis point to 1.72%, the highest in about 14 months.
- Australia’s ten-year bond yield rose one basis point to 1.82%.
Commodities
- West Texas crude oil fell 0.7% to $ 61.02 a barrel.
- Gold was $ 1,739.92 an ounce.
(Corrects the extent of the decline of the Turkish lira in the second paragraph.)