NEW YORK (Reuters) – Treasury yields fell Wednesday after Federal Reserve officials insisted they were tightening the currency position at any moment despite higher inflation expectations , while stocks went higher and an investment spike pushed lower oil prices.
The U.S. benchmark yield was on track to post its first full-session decline in 2021 even as a jump in gasoline pushed inflation higher last month. Consumer prices are expected to run warmer in a month or two as March and April 2020, which saw very low inflation, fall off the annual reading.
The climb in production is expected to begin, in part as a result of a major stimulus package from incoming Joe Biden administration, who comes into office on January 20th.
However, a number of Fed policymakers pushed back against the idea that the Fed would soon be tapering to buy assets anytime soon.
Stocks soared as Europe was driven by contracts and U.S. tech stocks were backed by Intel’s leadership change, which jumped 8.2%.
On Wall Street, the Dow Jones industrial average rose 66.94 points, or 0.22%, to 31,135.63, the S&P 500 gained 14.25 points, or 0.37%, to 3,815.44 and the Nasdaq Composite added 86.81 points, or 0.66%, to 13,159.24.
The pan-European STOXX 600 index rose 0.11% and global MSCI stock index gained 0.40%. Emerging market stocks rose 0.62%.
MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.58% higher, while Japan’s Nikkei rose 1.04%.
The U.S. dollar index rose for the fourth time in five sessions, still not far from nearly a three-year low that hit last week.
The greenback has been backed by the prospect of a continued economic recovery in the United States, even as European countries try to cut down on locks for the second wave of COVID-19.
“You see the continuation of U.S. performance trading,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
The dollar index rose 0.233%, with the euro down 0.31% to $ 1.2169.
The Japanese yen weakened 0.06% against the green back at 103.80 per dollar, while sterling last traded at $ 1.3648, down 0.11% on the day.
Benchmark’s 10-year U.S. notes last rose 16/32 in price to yield 1.0849%, from 1.138% late Tuesday.
Graphic: 10-year US Financial Result
Oil prices fell as the risk of lower demand due to global COVID-19 issues rose higher than supported by a larger-than-expected decline in U.S. crude investments.
“While I see crude prices trading higher in the coming months, investors need to be aware that the road to higher oil demand and prices will remain bumpy,” said UBS oil analyst Giovanni Staunovo.
US crude fell 0.55% to $ 52.92 per barrel recently and Brent was at $ 56.03, down 0.97% on the day.
Spot gold added 0.1% to $ 1,857.86 an ounce. Cash fell 0.21% to $ 25.52.
Bitcoin last rose 2.27% to $ 34,807.04.
Reporting by Rodrigo Campos; additional commentary by Herbert Lash, Saqib Iqbal Ahmed and Leila Kearney in New York; edited by Mark Heinrich