(Bloomberg) — Treasuries extended a selloff and the dollar rose as Federal Reserve Chair Jerome Powell dimmed hopes for lower interest rates.
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The “danger of moving too soon is that the job’s not quite done,” Powell said in an interview on CBS’s 60 Minutes on Sunday. US 10-year yields climbed seven basis points to 4.09%, and yields on debt from Australia to Germany also rose. European shares edged higher, while US equity futures fell.
The Treasury declines sent waves through bond markets, pushing down government debt from Australia to Germany. The dollar strengthened against most of its major peers. European shares edged higher while US equity futures declined.
Powell’s comments underscored how policy makers are pushing back against expectations for interest rates to fall early in 2024. The most recent jobs report, which showed a surge in hiring activity, has further raised concern there may be more work to do to keep a lid on inflation.
Earnings are in focus in the European trading session, with UniCredit SpA surging 7% after beating profit estimates.
In Asia, Chinese stocks saw another volatile session as investors assessed the latest pledges by policymakers to stabilize the slumping equity market. In a fresh round of hawkish rhetoric, former US President Donald Trump signaled he may impose a tariff on Chinese goods of more than 60% if elected. The benchmark CSI 300 index swung between losses of 2.1% and gains of 1.7%.
“Whether or not today marks the floor to Chinese equities is yet to be seen but it sure feels as though we’re bumping along the bottom as policymakers have signaled they no longer want to see any further declines,” said David Chao, a strategist at Invesco Asset Management in Singapore.
Key events this week:
Eurozone S&P Global Services PMI, PPI, Monday
Australia rate decision, Tuesday
Eurozone retail sales, Tuesday
Germany factory orders, Tuesday
Cleveland Fed President Loretta Mester, Philadelphia Fed President Patrick Harker speak, Tuesday
Bank of England Deputy Governor Sarah Breeden speaks, Wednesday
Fed Governor Adriana Kugler, Richmond Fed President Tom Barkin speak, Wednesday
China PPI, CPI, Thursday
Pakistan general election, Thursday
ECB Chief Economist Philip Lane, ECB Governing Council member Pierre Wunsch speak, Thursday
European Central Bank publishes economic bulletin, Thursday
US initial jobless claims, Thursday
US Treasury Secretary Janet Yellen speaks at a Senate banking committee hearing, Thursday
Australian Reserve Bank Governor Michele Bullock delivers parliamentary testimony, Friday
China aggregate financing, money supply, new yuan loans, Friday
Germany CPI, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 9:09 a.m. London time
S&P 500 futures fell 0.2%
Nasdaq 100 futures fell 0.1%
Futures on the Dow Jones Industrial Average fell 0.2%
The MSCI Asia Pacific Index fell 0.2%
The MSCI Emerging Markets Index fell 0.3%
Currencies
The Bloomberg Dollar Spot Index rose 0.2% to the highest since Dec. 11
The euro fell 0.2% to $1.0771
The Japanese yen was little changed at 148.39 per dollar
The offshore yuan was little changed at 7.2188 per dollar
The British pound was little changed at $1.2626
Cryptocurrencies
Bitcoin rose 0.5% to $42,969.90
Ether rose 0.8% to $2,317.45
Bonds
The yield on 10-year Treasuries advanced six basis points to 4.08%
Germany’s 10-year yield advanced three basis points to 2.27%
Britain’s 10-year yield advanced four basis points to 3.96%
Commodities
Brent crude was little changed
Spot gold fell 0.8%, more than any closing loss since Jan. 17
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson, Ishika Mookerjee and Tassia Sipahutar.
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