Yields on US Treasuries fell on Tuesday amid speculation about the Federal Reserve’s leadership, while stocks mixed when a rally in global equities was halted.
Treasuries rose following a report that Fed Governor Lael Brainard was interviewed for the top job at the US central bank Some commentators argue that the Fed would be more dovish on Brainard. Meanwhile, the yield on 30-year inflation-protected Treasuries fell to a record low, a sign of current concerns about inflation risks in the global economy.
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MSCI Inc.’s Asia-Pacific gauge changed little, while US futures fluctuated and Europeans fell back. The S&P 500 made an overnight gain to post its longest winning streak since 2017, but a drop in Tesla Inc. weighed on the Nasdaq 100. The Federal Reserve in a report warned that asset prices could fall if sentiment goes sour.
The dollar fell and the yen strengthened. In cryptocurrencies, Bitcoin topped $ 68,000 for the first time to set a new all-time high. That’s part of a broader rise in digital tokens that has brought their overall market value to more than $ 3 trillion.
Read: Bitcoin Breaks Above R1.02m Level For The First Time To Hit A Record
Global stocks are hovering around all-time highs. Treatments for the coronavirus, lowered travel restrictions, and the US $ 550 billion infrastructure bill have helped confidence. Key central banks have also indicated that they plan to reduce loose monetary policy very gradually. But a major risk is that inflationary pressures caused by crunching supply chains and energy prices last longer than officials expected.
“Central banks were less aggressive than markets expected last week, so we see real returns fall further into negative territory,” said Lale Akoner, senior market strategist at BNY Mellon Investment Management, on Bloomberg Television. Reflation trading is making a comeback again and the market is trading in “a medium cycle environment,” he said.
Powell and Brainard are the only people who have come out publicly as candidates for the Fed chairmanship. Jerome Powell’s current term in that position expires in February and Biden said on November 2 that he would make a decision “fairly quickly. “. A large majority of economists polled by Bloomberg News expect Biden to rename Powell.
The problems in China’s real estate sector continue to be the focus of attention. Two holders of dollar bills sold by a unit of China Evergrande Group have yet to receive payment for the coupons that officially expire on Saturday. China’s higher-quality dollar bonds are suffering their worst sell-off in about seven months as real estate woes spread to the broader credit market.
Elsewhere, crude has held steady as traders weigh the possibility of the United States taking steps to ease oil and gas prices. Gold was the highest in two months.
What to watch this week:
- The Central Decision-Making Committee of the Communist Party of China meets until Thursday.
- Federal Reserve Bank of San Francisco President Mary Daly speaks Tuesday.
- China’s aggregate financing, money supply, new loans in yuan on Tuesday.
- China PPI Wednesday.
- US Wholesale Inventories, CPI, Initial Jobless Claims Wednesday.
- The Marked US Bond is closed in observance of Veterans Day Thursday.
- China celebrates its annual Singles Day, the world’s largest shopping festival, when e-commerce giants like Alibaba and JD.com Inc. lure shoppers with bargains on Thursday.
- S&P 500 futures were down 0.1% at 6:05 am in London. The S&P 500 was up 0.1%.
- Nasdaq 100 futures were flat. The Nasdaq 100 fell 0.1%.
- Japan’s Topix index fell 0.8%.
- Australia’s S & P / ASX 200 Index lost 0.2%.
- South Korea’s Kospi index lost 0.1%.
- Hong Kong’s Hang Seng Index increased 0.1%.
- China’s Shanghai Composite Index rose 0.3%.
- Euro Stoxx 50 futures fell 0.3%.
- The Japanese yen stood at 112.77 per dollar, up 0.4%.
- The offshore yuan was trading at 6.3910 to the dollar.
- The Bloomberg Dollar Spot Index was 0.2% lower.
- The euro was at $ 1.1604.
- The 10-year Treasury yield stood at 1.48%, one basis point lower.
- The yield on Australia’s 10-year bonds rose three basis points to 1.78%.
- West Texas Intermediate crude was at $ 82.04 a barrel.
- Gold was at $ 1,825.29 an ounce.
© 2021 Bloomberg