Stocks, dollar slip as investors await Yellen

U.S. MARKETS were in a holding pattern early in the day, waiting for testimony that Federal Reserve Chair Janet Yellen will give to Congress Tuesday.  / BLOOMBERG NEWS FILE PHOTO/ANDREW HARRER
U.S. MARKETS were in a holding pattern early in the day, waiting for testimony that Federal Reserve Chair Janet Yellen will give to Congress Tuesday. / BLOOMBERG NEWS FILE PHOTO/ANDREW HARRER

NEW YORK – A global rally that sent U.S. benchmarks surging to a fresh round of records stalled as markets turned their attention to inflation data and Janet Yellen for clues on how quickly the Federal Reserve will tighten monetary policy. Oil rebounded.

The dollar fell against most peers and U.S. stocks slipped from all-time highs, as investors assessed reports showing accelerating price gains at Chinese and American factories. Treasuries erased losses to edge higher, with yields on 10-year notes holding at 2.43 percent. European stocks snapped a five-day winning streak. The pound retreated after U.K. inflation remained below the Bank of England’s 2 percent target.

Investors parsed the latest round of inflation data to see if they bolster the case for higher interest rates before a reading on U.S. consumer price data Wednesday. Those inputs could be overshadowed by any comments from Yellen on the Fed’s view of slowing wage growth and the prospects for fiscal stimulus from the Trump administration.

“You don’t need to look any further than Janet Yellen today,” said Neil Mellor, a London-based currency strategist at Bank of New York Mellon Corp. “Investors are waiting for something to trade on. Once Trump declares his hand, investors can start putting the jigsaw pieces into place, but until he does, it will be a volatile affair.”

- Advertisement -

What’s coming up in the markets:
Inflation will remain on the radar, with data from the United States coming on Wednesday. As well as Yellen, there will be speeches this week from a range of Fed officials that may also deliver insight into how the central bank is factoring promised increases in government spending into its thinking.

Here are the main moves in markets on Tuesday:

Currencies
The Bloomberg Dollar Index stayed lower, down 0.2 percent at 9:31 a.m. in New York, after U.S. wholesale prices jumped more than forecast in January. Sterling weakened 0.4 percent after data showed U.K. inflation increased to 1.8 percent from 1.6 percent in December, falling short of estimates in a Bloomberg survey. The euro gained 0.2 percent to $1.0617.

Stocks
The Stoxx Europe 600 Index fell 0.1 percent, poised to halt a five-day rally that brought it to the highest level in more than a year. The S&P 500 was little changed, after the benchmark index closed up 0.5 percent at a record 2,328.25 on Monday.

Bonds
The yield on 10-year Treasury notes was little changed after three days of advances. European bonds were mixed. The yield of German bunds due in a decade rose 1 basis point to 0.34 percent, while that on Italian peers fell two basis points to 2.19 percent.

Commodities
Oil gained 1.3 percent to $53.61, rising for the fourth time in five days. Investors are weighing rising U.S. crude stockpiles against output cuts from OPEC and other producing nations. Gold was 0.6 percent higher to $1,232.51, following a 0.7 percent drop in the previous session. The metal has flipped between losses and gains seven times, the longest run since October.

No posts to display