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Home / Business / Bonds Fall, Stocks Slip in front of Powell Testimony: Markets Wrap

Bonds Fall, Stocks Slip in front of Powell Testimony: Markets Wrap



(Bloomberg) – US government bonds coincided with European government bonds and stocks as investors scaled back bets on the extent of the Federal Reserve relief before the testimony of chairman Jerome Powell. Crude oil obtained.

The yield on 10-year government bonds moved over 2.1% for the first time in a month. Strong production data from France also weighed on central European bonds, with dividends on German Bundes, partly due to low demand for auction. The S&P 500 index futures pointed to a lower open in New York and the Stoxx Europe 600 gauge led for a fourth day of decline. Asia's trade session was mixed, with modest gains in Hong Kong and South Korea, and declining in Japan and China. The dollar was stable, and the pound strengthened for the first time in four days, as data showed that the British economy resumed in May.

The two days of Powell's two-yearly congressional congress on economic and political prospects will set expectations for the Fed's political meeting in late July. With both stocks and bonds having excellent gains since the beginning of the year, it is unclear what further impetus they can get given that traders are already discounting a cycle of interest rate reductions. Investors will also scour June meeting minutes out today for some signs that the Fed may withdraw on political easing.

"There is a very real risk that the Fed maintains a neutral attitude that members are certainly divided on the need for political accommodation," says Nema Ramkhelawan-Bhana, economist at FirstRand Bank Ltd. in Johannesburg. "If Powell follows a similar thanks , it will immediately resolve the tissue of risk that global markets have constructed over the past month. "

Meanwhile, US trade representative Robert Lighthizer and State Secretary Steven Mnuchin spoke on the phone with their Chinese counterparts, marking the first high-level contact After their presidents agreed to resume trade talks last month,

Elsewhere, West Texas's intermediary achieved most in a week as an industry report showing continued declines in US commodity stocks tightened delivering prospects threatened by increasing tensions in the Middle East.

Here are some important events that come up:

Powell witnesses before King The interest in monetary policy and the US economy on Wednesday (House of Representatives) and Thursday (Senate). Fed minutes are due on Wednesday, ECB protocols on Thursday. An important measurement of US inflation – the core consumer price index, due to Thursday – is expected to have risen by 0.2% in June from last month, while the wider CPI is expected to remain unchanged.

Here are the main features of the markets:

Stocks

Futures on the S & P 500 index declined 0.3% from 6:21 in New York. The Stoxx Europe 600 Index went down 0.2% to the lowest for more than a week. The UK's FTSE 100 Index doubled 0.2% to lowest in more than a week with its fifth consecutive downturn. Germany's DAX index went down 0.5% to lowest for almost two weeks. The MSCI Asia Pacific Index advanced 0.1%. The MSCI Emerging Market Index jumped 0.4%.

Currencies

Bloomberg Dollar Spot Index decreased 0.1%. Euro increased 0.1% to $ 1.121, the largest increase of more than two weeks. The British pound increased by 0.1% to $ 1,2477. The Japanese yen fell less than 0.05% to 108.88 per dollar.

Bonds

The yield on 10-year government bonds climbed four basis points to 2.10% to the highest for four weeks. Germany's 10-year return jumped six basis points to -0.29% on the biggest increase in 13 months. Krone's 10-year return increased six basis points to 0.8383% to the highest for more than a week.

Commodities

Gold fell 0.1% to $ 1,395.76 an ounce. West Texas Intermediate Crude got 2.1% to $ 59.06 a barrel for Highest in more than a week. Irronmalm doped 2.3% to USD 114.01 per tonne.

– With the help of Adam Haigh.

To contact the reporter on this story: Laura Curtis in London at lcurtis7@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Robert Brand

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