U.S. stocks steady; Cook’s dismissal, Nvidia earnings in spotlight
* Europe and Asia markets higher after U.S. tech stock surge
* Steadier bonds ease investor anxiety
* Market still wary of bond yields ahead of auctions
By Marc Jones
LONDON, March 10 (Reuters) - World share markets inched
higher on Wednesday after a stunning reboot in U.S. tech stocks,
while the dollar and benchmark government yields both ticked up
ahead of a key U.S. Treasury auction and inflation reading
later.
It all seemed a bit subdued after Tuesday's roaring 20%
surge in electric car doyen Tesla TSLA.O , 4% jump in the
Nasdaq and biggest one-day gain for global heavyweights Amazon
AMZN.O and Microsoft MSFT.O in well over a month.
Wall Street futures were fractionally lower .N , Asia
bounced off a two-month low as China's markets shrugged off
central bank policy tightening worries and Europe .STOXX was
helped by a new all-time high for Germany's DAX. .GDAXI .EU
The dollar and bond yields ticked up too. Traders were
focused on the U.S. bond auction and inflation data later, as
well as Thursday's European Central Bank meeting where it is
expected to respond to the recent jump in borrowing costs.
GVD/EUR /FRX
Mikhail Zverev, head of global equities at Aviva Investors,
said Tuesday's wild moves in big U.S. tech underscored how
volatile markets, which are increasingly dominated by
super-sized passive funds, are likely to be this year as the
world tries to reset after the COVID-19 pandemic.
"The winds are blowing harder now. The world isn't a more
dangerous place, a mild increase in interest rates is not a
cataclysmic event... but there is now the big-herd mentality
with a greater propensity for rotations," he said.
"They are moving more frequently, they are moving faster and
they are leaving a trail of inefficiency," making markets
vulnerable to big swings, he added.
Gains in Asian stocks overnight came after Chinese shares
fell to their lowest levels since mid-December the previous day
on the prospect of tighter policy and a slowing economic
recovery. .SS
News that a $1.9 trillion U.S. coronavirus relief package
was nearing final approval sparked a global spike in bond yields
on Monday. That pushed the Nasdaq more than 10% below its Feb.
12 closing high, confirming a correction for the index.
The yield on benchmark 10-year notes US10YT=RR nudged up
to 1.557%, having peaked at 1.626% on Friday, after Tuesday's
auction of $58 billion in U.S. 3-year notes was well received.
Yet many market investors remained wary, with the next tests
of investor appetite for government debt due later in the form
of a 10-year auction and then on Thursday a 30-year auction.
"Although the bond market has steadied a bit, pressures will
remain," said Naokazu Koshimizu, senior rates strategist at
Nomura Securities.
"It has priced in future normalisation of the Fed's monetary
policy, the Fed's policy becoming eventually neutral. But it has
not yet priced in the chance of its policy becoming tighter."
INFLATION PALPITATIONS
Wall Street futures were just showing softness after the
previous session's excitement saw Tesla and top six big tech
names pile on a combined $350 billion in value. .N
Some investors see a real risk of an overheated U.S. economy
and higher inflation on the back of the planned government
spending boom.
U.S. consumer price data due at 1330 GMT is expected to show
a slight acceleration in overall inflation in February, with
analysts expecting further gains in coming months due to base
effects from a severe economic downturn in early 2020.
The speedier rollout of COVID-19 vaccines in some countries
and the planned U.S. stimulus package helped underpin a brighter
global economic outlook, the Organisation for Economic
Cooperation and Development said on Tuesday as it raised its
2021 growth forecast. In foreign exchange markets, the dollar was supported by
expectations of a faster U.S. economic recovery.
The euro eased as much 0.25% to $1.1871 EUR= , not far from
Tuesday's 3 1/2-month low of $1.18355. The yen changed hands at
108.70 per dollar JPY= , having hit a nine-month low of 109.235
the previous day.
The Australian dollar shed 0.6% at one point to $0.7672
AUD=D4 after the country's top central banker rebuffed market
chatter about early rate increases. AUD/ Oil prices, which have surged 30% since the start of the
year, steadied meanwhile as concerns over a supply disruption in
Saudi Arabia eased.
Brent crude futures LCOc1 recovered from an overnight
wobble to sit at $67.45 per barrel, while U.S. crude futures
CLc1 hovered at $64.18 a barrel after a near 2 1/2-year high
of $67.98 on Monday.
Precious metal gold XAU= , which has suffered as bond
yields have risen this year, eased 0.2% to $1,712 per ounce
after rising more than 2% during Tuesday's frantic session.
"There's an element of corrective price action after a very
spirited gold rebound," DailyFX currency strategist Ilya Spivak
said.
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Tesla in FAANGtasy land https://tmsnrt.rs/2OCcPUm
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