Photographer: Burak Kara / Getty Images
Photographer: Burak Kara / Getty Images
Asian equities plan to start the week cautiously, with investors worried about rising bond yields and inflation as economic activity picks up. Turkey’s lira tumbled after the central bank chief was replaced.
US equities futures have fallen. Futures fell in Japan and Australia and were previously higher in Hong Kong. The Turkish Lira Sak as much as 15% in early Asian trade after President Recep Tayyip Erdogan removed the central bank governor after a larger-than-expected rate hike. The dollar rose against most Group-of-10 currencies.
The S&P 500 index rose lower on Friday. The financial sector weighed on the Dow Jones industrial average after the Federal Reserve dropped a capital shortfall for major banks. The tech-savvy Nasdaq 100 has recovered from Thursday’s slump. Oil has slipped to the worst week since October.
A heavy treasure chest Auctions in expiration dates that have recently taken a hit keep the bond market sharp this week. The ten-year yield ended above 1.7% last week, at its highest levels in about 14 months.
Investors’ concerns about the possibility of higher interest rates are the stock market and the bond market. The sale of bonds has driven higher yields and fueled a revolution in growth in value stocks, believing that the recovery in inflation could force the Fed to tighten monetary policy beyond its current guidance.
Fed Chairman Jerome Powell repeated in a Wall Street Journal main article that the central bank will provide assistance to the economy “as long as it lasts”.
“Clearly, the market is skeptical that the Fed will be able to keep interest rates at current levels for the next three years,” said Diana Mousina, senior economist at multi-asset group at AMP Capital Investors Ltd., said in a note. “We think that the nominal bond yield can continue to rise in the short term in the direction of 2% and higher on inflation problems. Markets are probably concerned that this move is permanent, rather than temporary. ”
A central bank exemption that allows credit providers to top up coffers and deposits without setting aside extra capital to reduce losses expires on March 31st. The regulator has also said that it will soon propose new amendments to this supplementary leverage ratio, or SLR.
Meanwhile, the European Union is set on blocks the export of the AstraZeneca Plc vaccine to the UK until the drug manufacturer complies with its delivery obligations to the block. The pound was weaker.
These are some important events to watch this week:
- Fed Chairman Powell is on Monday for the first time at the BIS Innovation Summit, a virtual gathering of major central bankers. He talks to Bundesbank’s Jens Weidmann about the progress of the digital age. The ECB’s Christine Lagarde, Andrew Bailey of BOE and heads of Sweden, Canada, Mexico and Brazil all follow.
- 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 the Treasury’s pandemic policy.
- EIA report on crude oil Wednesday.
- On Friday, February, U.S. revenue and expenses followed $ 600 stimulus checks, but ahead of the latest round of $ 1,400 payments, Americans’ bank accounts began to hit.
These are some of the key moves in financial markets:
Stocks
- S&P 500 futures fell 0.3% in Tokyo from 7:15 p.m. Nasdaq 100 futures fell 0.4%.
- Nikkei 225 futures earlier fell 0.6%.
- Australian S & P / ASX 200 index futures fell 0.2% earlier.
- Hang Seng Index futures earlier rose 0.4%.
Currencies
- The yen rose 0.1% to 108.83 per dollar.
- The Bloomberg Dollar Spot Index rose 0.1%.
- The euro fell 0.1% to $ 1.1887.
- The Australian dollar fell 0.2% to 77.26 US cents.
Effects
- The yield on 10-year treasury climbed one basis point to 1.72%, the highest in about 14 months.
- Australia’s 10-year bond yield rose one basis point to 1.82%.
Commodities
- West Texas Intermediate Crude Oil fell 0.7% to $ 61.02 a barrel.
- Gold was $ 1,739.92 per ounce.
(Correct the extent of the decline in the Turkish lira in paragraph two.)