Photographer: Burak Kara / Getty Images
Photographer: Burak Kara / Getty Images
Asian equities are poised for a cautious start to the week, with investors worried about rising bond yields and inflation as economic activity returns. The Turkish lira fell after the head of the central bank was replaced.
US stock futures fell. Futures fell in Japan and Australia and were higher in Hong Kong earlier. The Turkish lira has fallen up to 15% in early Asian transactions, according to President Recep Tayyip Erdogan eliminated the central bank governor following a higher-than-expected rise in interest rates. The dollar advanced against most of the Group’s 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 a large-scale capital flight to expire. The technically strong Nasdaq 100 recovered from Thursday’s crisis. Oil fell after its worst week in October.
A heavy slate of the Treasury maturing auctions that have recently taken a beating will keep the bond market on track this week. Ten-year yields ended last week at over 1.7%, at their highest levels in about 14 months.
Investors’ concerns about the possibility of higher interest rates dominate the stock and bond markets. Bond sales have propelled higher yields and fueled a rotation of growth in stock prices, with a view that rising inflation may force the Fed to tighten monetary policy sooner than its current guidelines suggest.
Fed Chairman Jerome Powell reiterated in a Wall Street Journal editorial that the central bank will provide aid to the economy “as long as it is needed.”
“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, a senior economist at many-The asset group of AMP Capital Investors Ltd., said in a note. “We believe that nominal bond yields may continue to rise in the short term by 2% and more due to inflation. Markets may be concerned that this move is permanent rather than temporary. “
A central bank exemption that allowed creditors to charge treasuries and deposits without setting aside additional capital to offset losses expires on March 31. The regulator also said it will soon propose new changes to this additional leverage ratio or SLR.
In the meantime, the European Union is established blocks AstraZeneca Plc vaccine exports to the UK until the doctor fulfills his delivery obligations to the block. The pound was weaker.
Here are some key events to watch out for in this week:
- Fed Chair Powell is the first Monday at the BIS Innovation Summit, a virtual gathering of major central bankers. He talks with Jens Weidmann of the Bundesbank about progress in the digital age. Christine Lagarde of the ECB, Andrew Bailey of the BOE and the leaders of Sweden, Canada, Mexico and Brazil follow.
- Powell and Treasury Secretary Janet Yellen are expected to make their first joint appearance before the US House Financial Services Committee to testify about the Fed’s pandemic and treasury policies.
- EIA report on crude oil inventory on Wednesday.
- Friday, February US personal income and spending data comes as a result of the $ 600 incentive check, but before the last round of $ 1,400, payments began to hit Americans’ bank accounts.
These are some of the main movements in the financial markets:
Inventories
- The S&P 500 futures fell 0.3% from 7:15 a.m. in Tokyo. Nasdaq 100 futures fell 0.4%.
- Nikkei 225 futures fell 0.6% earlier.
- The Australian S & P / ASX 200 futures index fell 0.2% earlier.
- The Hang Seng futures index rose 0.4% earlier.
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.
BONDS
- The 10-year Treasury yield rose 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 Oil fell 0.7% to $ 61.02 a barrel.
- Gold was $ 1,739.92 an ounce.
(Corrects the magnitude of the decline of the Turkish lira in the second paragraph.)