World stocks off record peak, dollar up on hawkish Fed official
Send a link to a friend
[August 05, 2021] LONDON/HONG
KONG (Reuters) - World stocks eased from the previous session's record
highs while the dollar reached its highest in eight days on Thursday,
after hawkish remarks from a senior U.S. Federal Reserve official.
Fed Vice Chair Richard Clarida, a major architect of the Fed's new
policy strategy, said on Wednesday he felt the conditions for raising
interest rates could be met by the end of 2022, raising expectations the
central bank could scale back its bond-buying programme soon.
"It's a question not of if the Fed taper but how fast the Fed taper,"
said Giles Coghlan, chief currency analyst at HYCM, adding he expected
tapering of the asset purchase programme to start in August or
September.
"Clarida has definitely taken a shift."
The MSCI world shares index was steady at 729.68, versus a record peak
of 731.88 hit in the previous session.
U.S. stock index futures - the S&P 500 e-minis - rose 0.17%. U.S. stocks
closed mostly lower on Wednesday after the Fed remarks, with the S&P 500
receding 0.46% from a record high after data signalled a slowdown in
jobs growth in July. [.N]
European stocks hit record highs, however, and were up 0.21% on strong
earnings from Danish company Novo Nordisk and German industrial firm
Siemens.
UK stocks were steady and the pound rose 0.18% against the dollar ahead
of a Bank of England Policy meeting.
Markets are looking for clues on any possible future UK rate rises,
particularly as two policymakers have broken ranks to say the time for
tighter policy might be nearing.
"The exit strategy, we think, will highlight the Bank's focus on
unwinding its bloated balance sheet more so than on hiking rates,"
Deutsche Bank analysts said in a note.
Clarida's remarks helped U.S. yields and the dollar.
The benchmark 10-year yield was last at 1.192%, up from a U.S. close of
1.187%, having touched 1.127% - its lowest level since February - on
Wednesday.
The dollar was steady against an index of currencies after hitting an
eight-day high of 92.352. The dollar was up 0.1% at 109.57 yen, while
the euro also gained 0.1% to $1.1848.
[to top of second column] |
Visitors looks at an electronic board showing the Japan's Nikkei
average at the Tokyo Stock Exchange (TSE) in Tokyo, Japan, February
9, 2016. REUTERS/Issei Kato
German 10-year bond yields fell 1 basis point to -0.504%. Yields dipped below
-0.50%, the European Central Bank's policy rate, for the first time since
January on Wednesday. [GVD/EUR]
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.29%.
Uncertainty about Chinese policy remains, but the Asian regional benchmark has
recovered most of the ground lost a week ago, when a series of Chinese
regulatory crackdowns on sectors from property to education squeezed Chinese
stocks and overshadowed the region as a whole.
The Chinese blue chip index was down 0.61%, weighed primarily by investors
dumping online gaming companies, fertilizer producers and e-cigarette makers
fearing criticism of these industries in state media could portend more
government crackdowns.
"In the short term, the further rebound may continue but uncertainties over
policy control will drive long-term investors away from Chinese technology
names," said Edison Pun, senior market analyst at Saxo Markets.
The Hong Kong index fell 0.83% and Korea, was down 0.3%. But Australian shares
hit a record closing high, led by banking stocks, and Japan's Nikkei climbed
0.52%.
Oil prices fell, wiping out early gains as more countries imposed movement
restrictions amid a surge in coronavirus cases and as the U.S. dollar firmed,
though tension in the Middle East kept prices from falling further. [O/R]
U.S. crude fell 0.19% to $68.02 a barrel while Brent crude dropped 0.21% to
$70.25 per barrel.
Gold was steady at $1,811.40 an ounce. [GOL/]
Ether, the world's second-largest cryptocurrency, dropped 1.75% having gained
8.7% a day earlier ahead of a technical adjustment to its underlying ethereum
blockchain, which should happen later on Thursday.
(Editing by Kenneth Maxwell, Kim Coghill and Giles Elgood)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |