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Home / Business / Bonds Case, Stocks Drop Ahead of Powell's Testimony: Markets Wrap

Bonds Case, Stocks Drop Ahead of Powell's Testimony: Markets Wrap



(Bloomberg) – U.S. Pat. Treasuries have been published by Chairman Jerome Powell on the extent of Federal Reserve easing before testimony. Crude oil gained.

The yield on 10-year Treasuries moved above 2.1% for the first time in a month.

S & P 500 index futures pointed to a lower open New York and the Stoxx Europe 600 gauge headed for a fourth day of declines. The trading session in Asia was mixed with modest gains in Hong Kong and South Korea and declines in Japan and China. The dollar was steady, and the pound strengthened for the first time in four days as data showed the U.K. Economy rebounded in May.

Powell's Two Days of Semi-Annual Testimony in Congress on the Economic and Policy outlook seeks to set expectations for the Fed's policy meeting at the end of July. With both equities and bonds sitting on outsize gains since the start of the year, it's unclear what further impetus they can get given that traders are already discounting a cycle of interest-rate cuts. Investors, therefore, want to scour June 26, 2009, to make a statement that the Fed will pull back on policy easing.

"There is a very real risk that the Fed will have to , Said Nema Ramkhelawan-Bhana, economist at FirstRand Bank Ltd. in Johannesburg. "If Powell follows a similar tack, it would immediately become unraveled over the last month."

Meanwhile, U.S. Trade Representative Robert Loughizer and Treasury Secretary Steven Mnuchin spoke on the phone with their Chinese counterparts,

Elsewhere, West Texas week as an industry report showing a continued draw-down in US crude inventories tightened a supply outlook. Mexico's peso steadied after news that the country's finance ministers quit.

Powell testifies before Congress on monetary policy and state of the us. Economy on Wednesday and Thursday (the Senate) .Fed minutes are due on Wednesday, ECB minutes on Thursday.A key measure of U.S. inflation – the core consumer price index, due Thursday – is expected to increase 0.2% in June from the previous month, while the broader CPI is expected to remain unchanged.U.S.

Stocks

Futures on the S & P 500 Index declined 0.2% as of 7:18 a.m. New York time.The Stoxx Europe 600 index dipped 0.1% .The UK's FTSE 100 index fell less than 0.05%, hitting the lowest in more than a week with its fifth consecutive decline.Germany's DAX Index declined 0.4% to the lowest in nearly two weeks.The MSCI Asia Pacific Index climbed 0.1% .The MSCI Emerging Market Index jumped 0.4%.

Currencies

The Bloomberg Dollar Spot Index fell less than 0.05% .The euro gained 0.1% to $ 1.1218.The British pound increased 0.1% to $ 1.2474.The Japanese yen declined 0.1% to 108.92 per dollar, the weakest in almost six weeks.

Bonds

The yield on 10-year Treasuries advanced to 3.10%, the highest in four weeks.Germany's 10-year yield gained six base points to -0.30% to the highest in almost three weeks a week.

Commodities

Gold fell 0.1% to $ 1,395.88 ounce.West Texas Intermediate gained 2.2% to $ 59.10 a barrel, hitting the highest in almost two weeks with its fifth straight advance.Iron ore decreased 1.5% to $ 115.00 per metric ton.

– With assistance from Adam Haigh. [LauraCurtisinLondonatlcurtis7@bloombergnet

Samuel Potter at spotter33@bloomberg.net, Robert Brand

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