Asian stocks held steady on Wednesday as investors assessed the economic recovery and the risk of a change in the Federal Reserve’s dovish policy projections. Yields on Treasuries remained near their highest levels in more than a year.
Japanese stocks changed little and China’s CSI 300 ranged between gains and losses. South Korea’s shares fell as Samsung Electronics Co. warned that it is dealing with the consequences of a “serious imbalance” in semiconductors globally. European and US stock futures fluctuated. The S&P 500 overnight broke a record run and the high-tech Nasdaq 100 posted a modest rise.
The 10-year Treasury yield stood at around 1.62% heading into the second day of the Fed meeting, after a 20-year bond. auction drew strong demand. Inflation expectations implicit in the market are at 12-year highs. The dollar was stronger against the major pairs.
The Fed’s policy and outlook updates to be released on Wednesday are in the spotlight as the global recovery gains ground. Rate markets are positioned for the central bank to increase borrowing costs sooner than current guidance suggests. Higher inflation expectations have boosted bond yields and caused a turnover from growth stocks to value stocks. Bond Investor Gross Invoice predicted in a Bloomberg TV interview that inflation will rise from 3% to 4% in the coming months.
“The concern is which assets have performed best over the last decade – rates, credit of all kinds and long-lasting stocks – may no longer be the only games in town,” said David Wong, investment strategist at AllianceBernstein.
In other places, sharp oil until trade around $ 65 a barrel. Bitcoin held at around $ 56,000, down from the weekend’s record above $ 61,000.
NOTE: Favorable macroeconomic conditions will continue to benefit value stocks, according to Allianz Global Investors.
Here are some of the key events this week:
- Fed Chairman Jerome Powell will likely reaffirm his stable policy stance at the Fed’s policy meeting on Wednesday.
- Bank of England rate decision on Thursday. The BOE is expected to leave monetary policy unchanged.
- Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing on Friday.
Stocks
- S&P 500 futures rose 0.1% at 6:20 am in London. The S&P 500 Index was down 0.2%.
- Japan’s Topix index rose 0.1%.
- Australia’s S & P / ASX 200 Index fell 0.5%.
- South Korea’s Kospi index fell 0.5%.
- Hong Kong’s Hang Seng Index changed little.
- China’s Shanghai Composite Index fell 0.1%.
Coins
- The yen fell 0.1% to 109.12 per dollar.
- The offshore yuan was trading at 6.5011 to the dollar.
- The Bloomberg Dollar Spot Index was up 0.1%.
- The euro was stable at $ 1.1905.
Captivity
- The 10-year Treasury yield was 1.62%.
- The yield on Australia’s 10-year bonds rose three basis points to 1.72%.
Raw Materials
- West Texas Intermediate crude was at $ 65.30 a barrel.
- Gold rose 0.3% to $ 1,736.67 an ounce.
– With the assistance of Haslinda Amin