European similarities abound; US yields ease after pushback on Taper Talk

LONDON (Reuters) – European stocks rose and the dollar rose after a volatile start on Wednesday, while 10-year US Treasury yields fell from 10-month highs, against talk of Fed support by policymakers Helped by pushing back.

FILE PHOTO: Visited on 29 December 2017 in London Stock Exchange Group’s office, City of London, UK. REUTERS / Toby Melville

After a slight rise in Asian equities, European shares opened lower and then rose slightly, with the pan-European STOXXX 600 days closing at 0918 GMT.

The MSCI World Equity Index, which tracks shares in 49 countries, was up 0.2%, back to all-time highs, and MSCI’s main European index was up by a similar amount.

China recorded its biggest daily jump in COVID-19 cases, for more than five months, despite the lockout in four cities, and the Dutch government said it would extend the lockdown measures on Tuesday.

Investors are closely watching the discussion around the taping – that is, the Fed’s ease of possible monetary stimulus.

Several Federal Reserve policy-makers, including Loretta Meister, Esther George, James Bullard, and Eric Rosengren, insisted on the Fed’s idea of ​​withdrawing its asset purchases soon.

These comments, coupled with a well-received auction of 10-year funds, pushed US 10-year yields back from a 10-month high of 1.187% in the previous session.

At 0919 GMT, the benchmark yield was 1.1189%.

The yield curve, which reached the highest fiscal stimulus expectations under a new Democratic administration since May 2017, decreased slightly to 96.8 basis points.

UBS strategists wrote in a note to clients, “We believe the possibility of fiscal stimulus as well as normalization of economic activity justifies slightly higher US Treasury yields as vaccine rollout ramps up .

“To acknowledge this, we have increased our 10- and 30-year US Treasury estimates by 0.1 percentage points this year to 1.0% and 1.7%, respectively,” he said. Central banks remain organized due to much higher than expected increases in yields and the Fed has indicated tolerance for high inflation.

Due to the recent yield jump, the US inflation data at 1330 GMT will be closely watched.

The US dollar broke its fall with a recent three-day win, then began to decline on Tuesday. It was stable overnight, but picked up in early London trading on Wednesday, asking if its boom had ended.

At 0920 GMT, it was up 0.1% in a basket of currencies versus 90.136.

Marshall Capital, head of investment research at the BDSwiss Group, pushes at least five Republicans to join Democrats to impeach President Donald Trump over the storming of the US Capitol, saying Trump should run in office in the future Stopping would “permanently” remove Trump. Premium “Allow the dollar to further weaken the currency.”

In Europe, government bond yields submerged. Italian bonds, which were sold on Tuesday due to political uncertainty, lagged behind Germany.

Euro zone industrial production data for November is due at 1000 GMT.

The Versus Dollar Euro was down around 0.21 095 at 0.21 095 at 0.20 GMT. Risk currencies such as the Australian dollar and the New Zealand dollar also fell to higher levels of the US dollar.

Bitcoin rose slightly, but the price of $ 34,999 was still about 17% lower than the all-time high of $ 42,000 reached on Friday last week.

US West Texas Intermediate and Brent crude traded at an all-time high since February, with oil prices rising for the seventh day, leading to a larger than expected drop in inventories after industry data and investors said the impact of the epidemic Has reduced.

Reporting by Elizabeth Howcroft, editing by William McLain


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