Photographer: Burak Kara / Getty Images
Photographer: Burak Kara / Getty Images
Asian stocks are poised for a cautious start to the week, with investors worried about rising bond yields and inflation as economic activity picks up. The Turkish lira plummeted 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 before. The The Turkish lira collapsed a whopping 15% in early Asian trade after President Recep Tayyip Erdogan removed the president of the central bank after a larger than expected rise in interest rates. The dollar appreciated against most of the Group of 10 currencies.
The S&P 500 Index fell slightly lower on Friday. The financial sector weighed down the Dow Jones Industrial Average after the Federal Reserve expired a capital cut for major banks. The tech-tough Nasdaq 100 rebounded from Thursday’s slump. Oil fell after its worst week since October.
A heavy treasure chest Auctions of maturities that have taken a hit recently will keep the bond market on edge this week. Ten-year interest rates ended above 1.7% last week, at its highest level in about 14 months.
Investor concerns about the possibility of higher interest rates dominate the stock and bond markets. Selling bonds has boosted yields and fueled growth in value stocks, in the belief that rising inflation could force the Fed to tighten monetary policy earlier than current forecasts suggest.
Fed Chairman Jerome Powell echoed this in a Wall Street Journal editorial that the central bank will help the economy “for as long as it takes.”
“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, senior economist at the United States. multi-asset group at AMP Capital Investors Ltd., said in a note. “We think that nominal bond yields could shoot even higher in the short term to 2% and above due to inflation concerns. Markets are likely to be concerned that this movement is permanent rather than temporary. “
A central bank exemption that allowed lenders to top up their Treasury bills and deposits without setting aside additional capital to absorb losses, expire on March 31. The regulator also said it will propose new changes to this additional leverage ratio, or SLR, soon.
Meanwhile, the European Union is set on block exports of the AstraZeneca Plc vaccine to the UK until the drug manufacturer meets its supply commitments to the block. The pound was weaker.
These are some important events to watch this week:
- Fed Chairman Powell will attend the BIS Innovation Summit for the first time on Monday, a virtual gathering of major central bankers. He talks with Jens Weidmann of the Bundesbank about progress in the digital age. Christine Lagarde from the ECB, Andrew Bailey from BOE and heads of Sweden, Canada, Mexico and Brazil all follow.
- Powell and Treasury Secretary Janet Yellen are expected to appear jointly before the US House Financial Services Committee on Tuesday to testify about the Fed and Treasury pandemic policies.
- EIA crude oil inventory report on Wednesday.
- Friday, February, data on US personal income and spending comes in the wake of $ 600 stimulus controls, but before the latest round of $ 1,400 payments started hitting Americans’ bank accounts.
These are some of the most important movements in the financial markets:
Shares
- Futures on the S&P 500 fell 0.3% from 7:15 am in Tokyo. Nasdaq 100 futures were down 0.4%.
- Nikkei 225 futures previously fell 0.6%.
- The Australian S & P / ASX 200 Index futures were previously down 0.2%.
- Hang Seng Index futures were up 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 cents.
Bonds
- Ten-year government bond yields rose one basis point to 1.72%, the highest in about 14 months.
- Australia’s 10-year bond yield rose by one basis point to 1.82%.
Raw materials
- West Texas Intermediate crude oil fell 0.7% to $ 61.02 a barrel.
- Gold was $ 1,739.92 an ounce.
Corrects the magnitude of the decline in the Turkish lira in section two.