Reassurance for a rate hike by Federal Reserve Board of Governors Jerome Powell diminished Thursday as US stocks fell and the rise in Europe slowed.
Wall Street soared on Wednesday and the Dow set another record, but fell in the first deal, giving up 0.1%.
The S & P 500 and Nasdaq Composite Index also fell.
In Europe, London’s share price rose 0.3%, Paris rose 0.1% and Frankfurt fell 0.1%.
Powell reiterated on Wednesday the central bank’s commitment to keep inflation at the 2% target and keep the financial faucet wide open until unemployment is curbed.
Powell addressed concerns that inflation could rise sharply, and rising prices were “unexpected and different from sustained high inflation, and if so, addressed it. There are tools to do that. “
OANDA analyst Craig Ahram said Powell’s soothing tone helped push stocks up late Wednesday, along with some positive news about the pandemic front.
“Despite Powell’s guarantee, investors are increasingly convinced that rising inflation will accelerate the tightening of central banks,” he added.
In addition to rising US Treasury yields, 10-year French government bonds have risen above zero for the first time since June 2020.
Yields on German government 10-year bonds have also risen if they remain in the negative territory.
Higher government bond yields, or investor returns, may indicate higher inflation expectations as the economy recovers from the pandemic.
“Yields have risen across the board, a sign of confidence in the global economy of a strong recovery in the post-pandemic world,” Erlam said.
“But it’s also a big headache for central banks, who are keen to stay very tolerant in the early stages of recovery,” he added.
Equities have skyrocketed in recent months on optimism about a vaccine-led global economic recovery, but imminent U.S. government stimulus may have boosted inflation and the Federal Reserve may reverse its ultra-loose monetary policy. Concerns continue.
Global markets worried about rising borrowing costs, as US President Joe Biden’s $ 1.9 trillion pandemic stimulus was set for the first large-scale legislative trial voted by the U.S. House of Representatives on Friday. I feel it.
Crude oil prices fell after a temporary peak of 13 months due to sudden demand, while the European single currency rose against the dollar, Powell said.
Asian equities have moved forward with the latest reassurance from the Fed.
London-FTSE 100: up 0.3% at 6,678.32 points
Paris-CAC 40: 0.1% increase at 5,803.80
Frankfurt-DAX30: down 0.1% at 13,959.82
EURO STOXX 50: Flat 3,705.49
New York-Dow: down 0.1% at 31,931.47
Tokyo-Nikkei 225: 1.7% increase 30,168.27 (closing price)
Hang Seng Index: Up 1.2% to 30,074.17 (closing price)
Shanghai-Comprehensive: 3,585.05 up 0.6% (closing price)
Euro / $: Greenwich Mean Time $ 2,200 rise from $ 1.2166 to $ 1.2223
Pounds / $: UP from $ 1.4141 to $ 1.4161
Euro / Pound: Rise from 86.03 pence to 86.32 pence
Dollar / yen: Up 106.17 yen from 105.87 yen
Brent Crude: $ 66.72 / barrel down 0.5%
West Texas Intermediate: $ 62.97 / barrel down 0.4%
Markets Meander As Effect Of Powell Rate Reassurance Fades Source link Markets Meander As Effect Of Powell Rate Reassurance Fades