LONDON v SINGAPORE (Reuters) – US Treasury yields fell to three-week lows, while stock markets were mixed on Tuesday due to concerns about potential blockages of the planned stimulus by new US President Joe Biden, 1, 9 trillion dollars.
The mounting of coronavirus cases and caution ahead of this week’s US Federal Reserve policy meeting dampened the risk appetite by supporting the dollar against a basket of currencies. Oil prices have fallen.
The yield on 10-year German government bonds, considered Europe’s safest asset, has fallen to a two-week low amid a new crisis of political turmoil in Italy.
But European stock markets [.EU] rose further after two sessions of declines, with the pan-European STOXX 600 up 0.8% after Swiss wealth manager UBS recorded a quarterly increase in net profit.
“The earnings season so far has been very good, so it comes back to the fact that the market has been overbought and had a strong rally since January 1, with a lot of positive price news,” said Francois Savary, chief investment officer. officer to the Swiss wealth manager Prime Partners, referring to recent losses.
“There is room for some consolidation.”
E-Mini futures for the S&P 500 fell 0.1%. On Monday, the Nasdaq index climbed a new high, but the Dow Jones Industrial Average fell [.N].
South Korea and Hong Kong outpaced Asian losses overnight, falling more than 2 percent. The sell-off led to a 1% drop in Japanese stocks and a 2% drop in the Chinese, the biggest one-day loss since September 9th.
All had peaked earlier this month.
MSCI’s All Country World Index, which tracks stocks in 49 countries, was flat, while MSCI’s emerging market stock index was 1.6% lower.
The stifling tensions in the Taiwan Strait and the South China Sea have added caution to Chinese markets, where a jump in short-cap bets has also caught the attention of regulators.
After a “buy it all” rally over several months, backed by money-printing pandemic stimulus packages, near-zero interest rates and the start of COVID-19 vaccination programs, some investors are worried that markets could be close. of the “balloon” territory.
They indicate huge asset prices such as bitcoin or, on Monday, the growing stock of video game retailer Gamestop.
US lawmakers have agreed that obtaining COVID-19 vaccines from Americans should be a priority, even if they have blocked horns over the size of a pandemic aid package. Democratic majority leader Chuck Schumer, however, warned that the aid package could be four to six weeks away.
The disagreements have meant months of indecision in the United States, where COVID-19 cases are over 175,000 a day and millions of people are out of work.
“We suspect the gains may not be able to live up to what people expect this year,” said Jacob Doo, investment director at Envysion Wealth Management, citing blockages in Europe and the slow launch of vaccines in the United States.
“In the technology space, we are cautious about FANGS now, simply because there may be antitrust laws that Biden will implement,” he added, using an acronym for major US technology companies, including Facebook and Amazon.
Investors are also looking forward to the Federal Reserve’s Open Market Committee meeting on Tuesday and Wednesday.
“We expect the January FOMC to repeat and strengthen existing Fed evidence, which is still significant, given recent taper discussions and other central bank considerations to adjust policy,” CitiFX strategist Ebrahim Rahbari said in a note.
Compared to a basket of its rivals, the dollar rose 0.2% to 90.65, the highest level since January 20, as stock volatility attracted the appetite for riskier currencies.
The euro, which fell on Monday after a poll showed German business morale, fell 0.2 percent to $ 1.2126. [USD/]
The 10-year yield of the US Treasury fell by a fraction to a three-week fresh low, the last time trading at 1.0414%. [US/]
Germany’s 10-year bond yield fell by one basis point to a two-week low of -0.561%, while Italy’s 10-year bond yields rose slightly that day to 0.655%.
Italian Prime Minister Giuseppe Conte will resign on Tuesday, his office said, hoping President Sergio Mattarella will then give him the mandate to form a new government.
After rising nearly 1% on Monday, Brent crude oil fell 0.5% to $ 55.60 a barrel, and US crude oil lost 0.5% to $ 52.51 a barrel. [O/R]
Spot gold fell 0.2% to $ 1,852.30 an ounce.
Edited by Shri Navaratnam, Richard Pullin and Catherine Evans