GLOBAL MARKETS-Shares slip, dollar creeps up as markets await Powell and Yellen

(Recasts)
* U.S., Europe sanctions against China hit shares
* Powell to testify on U.S. recovery
* Dollar, bonds strengthen as investors seek safety
* European shares slip
* Global currencies vs. dollar https://tmsnrt.rs/2PmYOcE

By Lawrence White and Alun John
LONDON/HONG KONG, March 23 (Reuters) - Shares edged down,
bond yields eased and the dollar crept up towards recent peaks
on Tuesday with markets in a cautious mood ahead of
Congressional testimony by Fed Chair Jerome Powell and Treasury
Secretary Janet Yellen later in the day.
The STOXX index of 600 European shares .STOXX was down
0.4%, while the benchmark 10-year German government bond yield
dropped 1.9 basis points to -0.3290% DE10YT=RR as Monday's
plunge in the Turkish lira and lingering concerns over
coronavirus infection rates drove investors to safer assets.
The dollar firmed and S&P 500 futures ESc1 were 0.28%
lower, with markets turning their attention to an update from
Powell. In remarks prepared for delivery to a congressional
hearing on Tuesday morning, the Fed chief said the U.S. economic
recovery had progressed "more quickly than generally expected".
"The FOMC last week laid out pretty clearly what the Fed's
view is with regard to rates... the next thing that markets will
focus on is maybe getting some details from Yellen with regard
to further infrastructure investment," said Alex Wolf head of
investment strategy for Asia at J.P. Morgan Private Bank,
referring to a statement from the Federal Open Market Committee.
MIXED MOOD
A mixed bag of new Western sanctions on China, coronavirus
concerns and Turkish tumult after President Tayyip Erdogan's
shock sacking of the central bank chief at the weekend left
investors awaiting a firmer signal. In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS dropped 0.66%, hurt by a 0.95%
fall in Chinese blue chips .CSI300 as a fresh wave of U.S. and
European sanctions related to human rights abuses in Xinjiang
hit. The fresh sanctions on China prompted an immediate riposte
from Beijing against the EU that appeared broader, including
European lawmakers, diplomats, institutes and families.
Adding to market jitters were further worries over the
efficacy of the AstraZeneca (NASDAQ:AZN) Plc AZN.L vaccine developed with
Oxford University after a U.S. health agency said the drugmaker
may have included outdated information in its data. Hong Kong's Hang Seng Index .HSI fell 1.62% and there was
a tepid market debut for Baidu 9888.HK , which saw the Chinese
tech giant's shares barely trade above their secondary listing
price.
Japan's Nikkei .N225 fell 0.61%, but emerging markets in
the region performed better. Benchmark 10-year U.S. Treasury notes US10YT=RR last
yielded 1.6505%, down from 1.732% late on Friday.
The dollar gained slightly against a basket of six major
currencies =USD last trading at 92.019, having slipped 0.32%
on Monday, while making advances against the kiwi, Aussie and
sterling.
The New Zealand dollar NZD=D3 hit a three-month low after
the government introduced taxes to curb housing speculation, a
move investors reckoned could allow the central bank to hold
interest rates lower for longer with less risk of a property
bubble.
Oil also dropped amid ample supply and concerns that new
pandemic curbs and slow vaccine rollouts in Europe will slow a
recovery in fuel demand.
"Global travel is still looking like it could be a while
away," said Matt Stanley, a fuel broker at Star Fuels in Dubai,
adding that a second-half recovery in oil demand looked doubtful
as lockdowns remain the order of the day. U.S. West Texas Intermediate crude oil futures CLc1
dropped 1.07% and Brent crude futures LCOc1 dropped by 1.24%
to $63.90 per barrel.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
U.S. Treasury yields and inflation expectations https://tmsnrt.rs/2NOAXmE
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>