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Treasuries climb on Fed speculation; Equity stability: market envelope

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(Bloomberg) – U.S. Treasury yields fell on Tuesday amid speculation about the Federal Reserve’s leadership, while stocks were mixed as the rally in global stocks came to a halt.

Treasuries rose, with shorter maturities leading gains, following a report that Fed Governor Lael Brainard was interviewed for the top central bank job. Some commentators see a more accommodating Fed under Brainard. Meanwhile, the yield on inflation-protected 30-year Treasuries slipped to an all-time high, a sign of lingering concerns about inflation risks in the global economy.

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MSCI Inc.’s Asia-Pacific gauge was little changed, while US futures fluctuated and European contracts declined. The S&P 500 gained to post its longest winning streak since 2017, but a drop from Tesla Inc. weighed on the Nasdaq 100. In a report, the Fed warned that asset prices could fall if sentiment was degrading.

The dollar fell and the yen strengthened. In cryptocurrencies, Bitcoin broke above $ 68,000 for the first time to set a new high. This is part of a larger rise in digital tokens that have taken their overall market value to over $ 3 trillion.

Global stocks remain around historic highs. Coronavirus treatments, easing travel restrictions and the US $ 550 billion infrastructure bill have helped sentiment. The major central banks have also indicated that they plan to ease their monetary policy very gradually. But a major risk is that inflationary pressures caused by crunching supply chains and energy prices last longer than expected.

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“Central banks were less hawkish than markets expected last week, so we are seeing even lower real yields in negative territory,” Lale Akoner, senior market strategist at BNY Mellon Investment Management, told Bloomberg Television. Reflation trading is coming back and the market is pricing in “a mid-cycle environment,” she said.

Powell and Brainard are the only people to have publicly surfaced as vying for the Fed chairmanship. Jerome Powell’s current term in office expires in February, and Biden said on November 2 he would make a decision “fairly quickly.” A large majority of economists polled by Bloomberg News expect Biden to rename Powell.

The problems of the Chinese real estate sector remain at the center of the concerns. Two holders of dollar tickets sold by a unit of the China Evergrande group have yet to receive payment for the coupons that were officially due on Saturday. China’s higher-quality dollar bonds are experiencing their worst sell-off in about seven months as real estate issues spill over into the broader credit market.

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Elsewhere, crude remained stable as traders assessed the possibility of US measures to ease oil and gas prices. Gold was around the highest in two months.

To watch this week:

Communist Party of China Central Decision-Making Committee meets until Thursday Federal Reserve Bank of San Francisco President Mary Daly speaks Tuesday China overall financing, money supply, new yuan loans Tuesday China PPI Wednesday United States. Wholesale stocks, CPI, initial jobless claims Wednesday United States Marked bond closed on Veterans Day on Thursday China holds its annual Singles Day, the world’s largest shopping festival, when giants e-commerce companies like Alibaba and JD.com Inc. attract buyers with good deals on Thursday

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For more market analysis, read our MLIV blog.

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S&P 500 futures fell 0.1% at 6:50 am in London. The S&P 500 rose 0.1%. Futures contracts on the Nasdaq 100 remained stable. The Nasdaq 100 fell 0.1% Japan’s Topix index fell 0.8% Australian S & P / ASX 200 index lost 0.2% South Korea’s Kospi index rose 0, 1% Hong Kong Hang Seng Index rose 0.2% Chinese Shanghai Composite Index rose 0.2% Euro Stoxx 50 futures fell 0.3%

Currencies

The Japanese yen was at 112.84 per dollar, up 0.4%. The offshore yuan was trading at 6.3920 to the dollar. The Bloomberg Dollar Spot Index was down 0.1%.

Obligations

The 10-year T-bill yield was 1.48%, down one basis point Australia’s 10-year bond yield rose three basis points to 1.78%

Merchandise

West Texas Intermediate crude was at $ 81.98 per barrel Gold was at $ 1,823.41 per ounce

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