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- Stocks and oil fall, bonds rise – market wrap
Stocks and oil fall, bonds rise - market wrap
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Loading...During the Asian market session stocks retreated as banks slumped and oil touched the lowest level since November. Bonds rallied amid lingering inflation concerns even after Federal Reserve Chair Janet Yellen suggested weak readings won’t persist.
Energy and raw-material shares had the biggest declines on the MSCI Asia Pacific Index as oil traded below $45 a barrel. Australian bonds followed a rally in Treasuries as data showed U.S. consumer prices excluding volatile food and fuel had the smallest year-over-year gain since May 2015. U.S. equity futures fell on a report that investigators are probing whether President Donald Trump attempted to obstruct justice. The Aussie dollar jumped after an encouraging jobs report.
Yellen played down a softening of price pressures in the last few months and voiced confidence the central bank was on course to hit its 2 percent inflation goal. The Fed’s actions and words struck a careful balance between showing resolve to continue tightening in response to falling unemployment while acknowledging the persistence of unexpectedly low inflation this year.
Policy makers agreed to raise their benchmark lending rate for the third time in six months, maintained their outlook for one more hike in 2017 and set out some details for how they intend to shrink their $4.5 trillion balance sheet this year.
Political drama in Washington also weighed on markets. The special counselinvestigating Russia’s interference in the 2016 election plans to interview two top U.S. intelligence officials about whether Trump sought their help to get the FBI to back off a related probe of former National Security Adviser Michael Flynn, according to three people familiar with the inquiry.
The Bank of Japan concludes a two-day meeting on Friday. While economists don’t expect any significant changes to monetary policy, they will parse the BOJ’s statement and Governor Haruhiko Kuroda’s comments for clues to the outlook for inflation.
Central banks in Switzerland, Indonesia and Britain are also scheduled to weigh in with policy decisions this week.
Source: Bloomberg Pro Terminal
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