The benchmark 10-year Treasury yield spiked to 1.533% after Powell’s speech
Wall Street stocks saw another bearish session overnight following comments from Federal Reserve Chairman Jerome Powell. The central bank governor disappointed investors who had hoped him to say more about how the Fed would react to cap a rally in bond yields. The benchmark 10-year Treasury yield spiked to 1.533% after Powell’s speech.
Furthermore, the report from the Labor Department showed that jobless claims rose by 9,000 last week, to 745,000. As a result, the S&P 500 fell 1.34%, its third straight loss. The Dow Jones Industrial Average lost 1.11%, and the Nasdaq Composite dropped 2.11%.
Asian shares extended losses Friday as U.S. bond yields continue to surge, adding to investor worries about inflation. The Shanghai Composite declined marginally after Chinese Premier Li Keqiang announced the country’s economy would target growth of over 6% for 2021. In Japan, Nikkei 225 shed 0.23% after the government recommended extending its virus state of emergency by two weeks for the Tokyo region set to expire Sunday. South Korea’s Kospi and S&P ASX 200 In Australia lost 0.57% and 0.74%, respectively.
In Europe, equities opened lower to start the day despite Treasuries are keeping calmer for now, with 10-year yields seen down 2 bps to 1.543%. US futures are also keeping slightly lower after having pared early losses. The pan-European Stoxx 600 dropped 0.9% in early trade. On the data front, UK February Halifax house prices declined 0.1% versus 0.0% m/m expected and -0.3% in the previous month.
Meanwhile, the dollar extends the rally amid safe-haven demand. EURUSD plunged to fresh three-month lows, now threatening the 1.9000 handle ahead of the US NFP employment data due later today. If this level gives up, the common currency would target the 1.1810 level.
