Domestic Bonds

Asia Morning Call-Global Markets | Reuters

January 12 (Reuters) – ——————————————– – ——————————————–

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ACTIONS

WORLD – US stocks increased their losses on Tuesday after Federal Reserve Chairman Jerome Powell said the central bank was likely to raise interest rates this year, remarks that dampened demand for risky assets and increased bond yields.

Benchmark 10-year Treasury yields climbed to 1.7764% on Powell’s comments, after peaking nearly two years above 1.8% overnight.

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NEW YORK – U.S. stock indexes fell on Tuesday ahead of testimony from Federal Reserve Chairman Jerome Powell, which may offer new insights into tightening policies and the central bank’s plans to fight inflation.

At 9:44 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 253.81 points, or 0.70%, to 35,815.06, the S&P 500 (.SPX) was down 27.75 points, or 0.59%, to 4,642.54, and the Nasdaq Composite (.IXIC) lost 95.47 points, or 0.64%, to 14,847.36.

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LONDON – Investors recovering in tech stocks along with optimistic expectations for the fourth quarter earnings season led European stocks to rally on Tuesday after fears of a rate hike led to heavy losses in recent sessions.

The pan-European STOXX 600 (.STOXX) closed 0.8% higher, recovering from its worst day in 1.5 months.

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TOKYO – Japan’s Nikkei Index closed about 1% lower on Tuesday, following the weak overnight Wall Street result amid cautiousness about a possible US Federal Reserve rate hike as early as March, while rising Treasury yields caused tech stocks to sell off.

The Nikkei stock average (.N225) fell 0.9% to close at 28,222.48, while the wider Topix (.TOPX) slipped 0.44% to 1,986.82.

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SHANGHAI – Chinese stocks closed lower on Tuesday as expectations of faster US Federal Reserve interest rate hikes and national COVID-19 outbreaks weighed on sentiment, defense stocks and investors. information technology leading the decline.

The blue-chip CSI300 index (.CSI300) fell 1.0% to 4,797.77, while the Shanghai Composite Index (.SSEC) fell 0.7% to 3,567.44.

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AUSTRALIA – Australian stocks closed nearly 1% lower on Tuesday, led by financial services, as an increase in COVID-19 infections in the country hovered around record highs, pushing down major retailers.

The S & P / ASX 200 Index (.AXJO) ended down 0.77% to 7390.1, extending losses for the second straight session. The benchmark index fell 0.08% on Monday.

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SEOUL – South Korean stocks closed flat on Tuesday as investors warned investors pending Federal Reserve Chairman Powell’s appointment hearing and US inflation data.

The benchmark KOSPI (.KS11) closed 0.66 points, or 0.02%, higher at 2,927.38, recovering from earlier losses of 0.58%.

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EXTERNAL CHANGE

NEW YORK – The dollar edged up against a basket of currencies on Tuesday as a bout of volatility in global financial markets limited demand for riskier currencies and investors awaited testimony from the Federal Reserve Chairman , Jerome Powell, at a hearing in the United States Senate.

The dollar index, which measures the greenback against six major peers, was up 0.06% to 95.997.

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SHANGHAI – The Chinese yuan appreciated slightly against the dollar on Tuesday due to strong demand from businesses, but traders said the opportunities for a breakout to the upside are limited as expectations that the US Federal Reserve will will accelerate the rise in interest rates support US yields.

The spot yuan opened at 6.3740 to the dollar and changed hands at 6.3706 by noon, 62 pips firmer than Monday’s trading close.

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AUSTRALIA – The Australian and New Zealand dollars were stuck on Tuesday as increasingly hawkish outlook for US interest rates overshadowed bullish news on the domestic economy.

The Aussie was a bit firmer at $ 0.7182, but sandwiched between support at $ 0.7130 and resistance around $ 0.7203.

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SEOUL – The Korean won strengthened, while the benchmark bond yield fell.

The won closed at 1,194.7 per dollar on the onshore settlement platform, 0.37% higher than its previous close.

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TREASURY

NEW YORK – Short-term U.S. Treasury yields hit nearly two-year highs on Tuesday as investors braced for the likelihood that the Federal Reserve would hike rates up to four times this year, and before the Department Treasury does not sell new three-year notes.

Highly interest rate sensitive two-year bond yields jumped to 0.945% and three-year yields hit 1.237%, both the highest since February 2020.

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LONDON – Italian government bonds underperformed their eurozone counterparts on Tuesday as markets remained focused on the path of US monetary policy normalization and surging inflation.

The Italian 10-year bond yield, which has been converted to a new benchmark, rose 1.38% after hitting its highest level since June 2020 at 1.397%. .

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TOKYO – Japanese government bond (JGB) yields rose on Tuesday, following firmer moves in overnight US Treasury yields that helped offset relatively strong results from the country’s bond-buying trades. Bank of Japan.

The 10-year JGB yield increased 1.5 basis points to 0.145% and the 20-year JGB yield increased 0.5 basis points to 0.525%.

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BASIC PRODUCTS

GOLD

Gold prices firmed above the $ 1,800 mark on Tuesday, supported by a drop in the dollar and US Treasury yields, as investors waited for indications of the President’s expected political tightening. Federal Reserve, Jerome Powell.

Spot gold was last up 0.1% to $ 1,803.20 an ounce at 9:47 am ET (1447 GMT). US gold futures rose 0.3% to $ 1,804.00.

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IRON-ORE

Chinese stainless steel futures jumped more than 5% on Tuesday, spurred by tight supply issues as producers cut production, while high commodity prices also offered support.

The most actively traded stainless steel contract on the Shanghai Futures Exchange, for delivery in February, jumped 5.3% to 17,920 yuan ($ 2,812.39) per tonne.

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BASE METALS

Nickel prices hit their highest level in nearly a decade on Tuesday, with lower global inventories indicating strong demand as a London Metal Exchange (LME) blackout hit trade.

The three-month benchmark nickel on the LME rose 5% to $ 21,430 per tonne at 5:20 p.m. GMT, its highest level since reaching $ 21,850 in February 2012.

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OIL

Oil hit over $ 83 a barrel on Tuesday, supported by tight supply and expectations that increasing coronavirus cases and the spread of the Omicron variant will not derail a recovery in global demand.

Brent crude rose $ 2.6, or 3.22%, to $ 83.46 a barrel at 11:30 a.m. ET (4:30 p.m. GMT), its highest level since early November, after losing 1% in the previous session.

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PALM OIL

Malaysian palm oil futures reversed their losses and hit a nearly 10-week high on Tuesday, bolstered by concerns over tight supply after official figures showed a larger-than-expected drop in prices. December stocks.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed at 43 ringgits, or 0.8%, at 5,069 ringgits ($ 1,210.50) per tonne, its highest high level since November 3.

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RUBBER

Japanese rubber futures slipped on Tuesday, as the rally in the yen against the dollar prompted the selloff, amid fears that the spread of the Omicron coronavirus variant around the world could slow global demand for the material have shaken market sentiment.

Osaka Exchange’s rubber contract for June delivery ended at 1.9 yen, or 0.8%, down to 239.5 yen ($ 2.1) per kg. Japanese financial markets were closed on Monday for a public holiday.

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