Asian stocks rely on Powell to remain accommodative By Reuters

By Marc Jones

LONDON (Reuters) – Stocks stalled on Wednesday as rising Treasury yields kept the dollar steady, as investors waited to see whether the world's most powerful central banker would confirm or refute market expectations. a reduction in the US rate this month.

The broadest index of MSCI's global equities () has hardly changed after three days of losses. The modest beginnings of Europe reflected the caution that prevailed before the event, rather than the way the day would unfold.

London's FTSE () edged up 0.2% and Paris () also advanced after better-than-expected French industrial data. The German Dax () was down with a loss of 0.1% and the futures on E-Mini for the S & P 500 () were a little weaker.

Japan's Nikkei () also finished lower and Chinese stocks () barely moved, as data showed that inflation remained under control.

Worrying global inflation is one of the reasons why investors rely on dubious Federal Reserve Chairman Jerome Powell when he testifies before Congress on Wednesday.

Futures contracts still fully take into account a 25 basis point cut at the July 30-31 Fed meeting, but they no longer suggest a half-point move. They had implied a 25% chance of an aggressive cut before the release of an optimistic report on US jobs on Friday.

"I think the market seems to be switching to a less accommodating message from Powell than a few weeks ago," said Neil Mellor, New York Bank strategist Mellon (NYSE :).

He still thought that the Fed would cut 25 basis points this month – the first US cut since the financial crisis – but that continues is much less clear.

"The real interest is what happens next," said Mellor. "If we're talking about a stronger dollar, then we have to keep in mind the comments of President Donald Trump last week, who said," Well, maybe we should start manipulating the dollar. "

During the night, Atlanta Fed Chairman Raphael Bostic said the central bank was debating the risks and benefits of letting the US economy "warm up a bit more".

At the same time, US and Chinese trade officials held "constructive" trade talks Tuesday by phone, said White House economic adviser Larry Kudlow.

Wall Street was duly cautious, with the Dow () ending down 0.08%, while the S & P 500 () added 0.12% and the Nasdaq () 0.54%.

A LITTLE YIELD

The slowdown in the US rate hike saw bonds give up a bit of their rally. Two-year Treasury bill yields have risen at 1.917% of their recent low of 1.696% and Europe's benchmark yields up about five basis points.

It also helped the basket of currencies rebound to 97,500 () after a trough of 95,843 in June.

The dollar also gained 108.92 yen , although the more favorable French data allowed the euro to climb to USD 1.1225 (), still down from the USD 1.1412 level a few weeks ago.

The Mexican peso began to recover after its fall on Tuesday when Finance Minister Carlos Urzua suddenly resigned, citing "extremism" in economic policy.

The Canadian dollar was on the defensive before a meeting of the Bank of Canada, in case policymakers tried to slow down the recent rise in the currency.

Gold fell 0.3% to $ 1,393.68 an ounce as the dollar has won.

Oil prices rose because of tensions in the Middle East and the announcement of the fall in US stocks for the fourth consecutive week. Brent futures () gained 64 cents to $ 64.80. US crude () rose 82 cents to 58.65 dollars a barrel.