Dollar Mixed As Investors Consider Powell's Comments

Jay Powell Is Janet Yellen's Trap Queen

The market sentiment suffered a jolt after other Asian markets closed with widespread losses and European markets dropped in early trade, tracking a slump in the US stocks overnight after the US Fed chair revived worries about a sharp increase in interest rates.

US benchmark 10-year Treasury notes last rose 15/32 in price to push yields lower to 2.8114 percent but are still near four year highs.

The Dow was down 470 points, or 19 percent, at 24,554.

MSCI's gauge of stock performance in 47 countries shed 0.99 percent to close at 512.96.

At 12:30 p.m. ET, the Dow Jones Industrial Average was down 0.42 per cent at 25,601.84.

Germany's 10-year yield retreated one basis point to 0.64 percent, the lowest in five weeks.

On the inflation framework, Powell pushed back against proposals, including from Fed officials, to either raise the Fed's inflation target or move to a different approach that would allow for more aggressive interest-rate cuts during a recession.

Federal Reserve Chairman Jerome Powell said he sees no signs the US economy is overheating and reiterated the central bank will continue to raise rates gradually to keep unemployment and inflation in balance.

Higher rates make bonds more attractive as investments and can divert buyers away from stocks.

Steelmakers AK Steel Holding rose 9.5 percent, U.S. Steel Corp gained 5.8 percent and Nucor rose 3.26 percent. The SPX dropped during Powell's testimony, while the VIX and the 10-year Treasury yield spiked.

Jay Powell Is Janet Yellen's Trap Queen
Dollar Mixed As Investors Consider Powell's Comments

SAILING HIGHER: Booking Holdings, the company formerly known as Priceline, jumped to the biggest gain in the S&P 500 after it reported a bigger profit for the latest quarter than analysts expected, aided by stronger travel bookings. December's 2.5 percent rate was the lowest since 2007. The bank is also expected to remove some of the board members that were on the job during the scandals.

Treasury yields rose Tuesday and the Standard & Poor's 500 index slid to its first loss in four days after the head of the Federal Reserve said he's feeling more optimistic about the economy. It was a continuation of the remarkably smooth rise that investors enjoyed in 2016.

Powell brushed aside concerns in some financial circles that the continued rise in the share market is creating a bubble that could lead to a crisis, saying that while the Fed had to be alert to the build-up of financial imbalances, the risk did not appear to be high.

MARKETS OVERSEAS: Global markets were subdued.

In Asia, Japan's Nikkei 225 tumbled 1.4 percent, South Korea's Kospi lost 1.2 percent and the Hang Seng in Hong Kong lost 1.4 percent.

Among the major indexes in the region, the CAC 40 Index of France is down 61.65 points or 1.16 percent, the German DAX is losing 196.44 points or 1.58 percent, the U.K. FTSE 100 Index is slipping 49.84 points or 0.69 percent and the Swiss Market Index is declining 78.41 points or 0.88 percent.

This year, the dollar index is still down 1.5 percent, pursued by suspicions that the Trump administration prefers a weaker dollar to fix its ballooning trade deficit.

The Energy Information Administration or EIA's Natural Gas Report that tracks weekly information on natural gas stocks in underground storage of the USA will be published at 10.30 am ET.

Gold prices fell 0.07 per cent to Dollars 1,316.80 an ounce and silver by 0.37 per cent to USD 16.32 an ounce in Singapore.

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