Markets Wrap

A global rally that sent U.S. benchmarks surging to a fresh round of records faltered, as equities from London to Tokyo slid and the dollar dropped amid fresh questions how effective the Trump administration will be in spurring growth. Treasuries steadied.
The dollar deepened losses against most major currencies and U.S. stock futures were dragged lower by a mood of uncertainty before Federal Reserve Chair Janet Yellen’s semi- annual testimony before Congress. European stocks snapped a five-day winning streak. The pound was the only major currency to decline against the greenback after U.K. inflation remained below the Bank of England’s 2 percent target.
Disarray in the White House after Donald Trump’s national security adviser resigned has helped deflate optimism over expected pro-growth policies that sent the S&P 500 Index to another unprecedented high on Monday. Attention now shifts to Yellen’s first Congress appearance since Trump was sworn in, as investors seek clues on whether the Fed will accelerate monetary tightening to make way for the administration’s promised fiscal stimulus.
The Bloomberg Dollar Index fell 0.2 percent at 10:14 a.m. in London. The euro gained 0.1 percent to $1.0609.
Sterling weakened 0.6 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 Australian dollar strengthened 0.6 percent. Business conditions jumped to the highest level in more than nine years and the employment gauge surged, diminishing the likelihood of interest-rate cuts in the near term.

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