(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 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:
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%.
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.
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.
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.
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