GLOBAL MARKETS – Stocks decline as rotation continues; yields, rising dollar

* US 10-year yield hits 13-month high

* Gold has changed little, bitcoin is plunging

* Crude slips after two strong weekly increases (price updates, comments)

NEW YORK, March 12 (Reuters) – A worldwide stock index fell on Friday but was expected to post its biggest weekly gain in five, as benchmark T-bill yields soared to 13-month highs, in part thanks to to optimism after a recovery of $ 1.9 trillion package was signed into law.

Gains in the Shanghai and Tokyo stock markets proved difficult to match in Europe and Wall Street, where banks played a positive role and the Nasdaq underperformed as the rotation from growth to value slowed down. continued. The Dow Industrials hit a record high.

Soaring Treasury yields supported the dollar while the selloff in stocks highlighted the greenback’s safe haven appeal.

Amid extremely loose monetary policy, some analysts expect inflation to pick up as vaccine deployments lead to the reopening of economies, raising fears that the stimulus package could overheat the US economy.

US President Joe Biden signed the stimulus bill before giving a televised speech Thursday evening in which he pledged to take aggressive action to speed up vaccinations and bring the country closer to normal by July 4.

“We’re back to the idea that more growth is more inflation and investors are a little nervous about the current levels of return affecting tech stocks,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments in Houston.

“It all depends on the pace of growth in yields and the market appears to be comfortable with another 10 to 20 basis point jump in the benchmark yield if it is supported by strong data that shows an economic recovery.”

The Dow Jones Industrial Average rose 233.39 points, or 0.72%, to 32,718.98, the S&P 500 lost 3.36 points, or 0.09%, to 3,935.98 and the Nasdaq Composite fell by 111.26 points, or 0.83%, to 13,287.42.

The pan-European STOXX 600 index lost 0.26% and the MSCI gauge of equities around the world lost 0.17%.

Emerging market equities lost 0.76%. Overnight, the largest MSCI Asia-Pacific stock index outside of Japan closed 0.69% lower, while Japan’s Nikkei rose 1.73%.

Yields on 10-year US Treasuries exceeded 1.6% and were on track to post their seventh consecutive weekly increase.

“The rate bias is even higher, except in the event of an unforeseen vaccine rollback or explicit Fed action,” said Gregory Faranello, head of US rates at AmeriVet Securities in New York.

Producer prices in the United States posted their biggest annual gain in nearly 2.5 years in February, but still high unemployment could make it harder for businesses to pass the higher costs on to consumers.

The 10-year benchmarks last fell 30/32 to a return of 1.6317%, down from 1.527% on Thursday night.

Recent market swings put even more weight on next week’s meeting of the US Federal Reserve for clues to its views on rising yields and the threat of inflation.

In currency markets, the dollar index rose 0.244%, with the euro down 0.28% to $ 1.1951.

The Japanese yen weakened 0.51% against the greenback to 109.04 per dollar, while the British pound last traded at $ 1.3923, down 0.48% on the day.

Markets are expected to remain volatile in the second quarter, especially for the dollar, which was much stronger than expected at the start of the year, said Cliff Zhao, chief strategist at China Construction Bank International.

“The strength of the US dollar could weigh on some liquidity conditions in emerging markets,” he said.

The Institute of International Finance on Thursday urged the Fed to advise on its handling of higher yields to avoid even more exits from emerging markets.

Oil prices fell as Brent and WTI struggled to keep the weekly performance in positive territory after rising more than 10% in the past two weeks.

US crude fell 0.53% to $ 65.67 a barrel on Friday and Brent was at $ 69.22, down 0.59% on the day.

Spot gold added 0.1% to $ 1,722.56 an ounce. Silver fell 0.79% to $ 25.87.

Bitcoin last fell 1.43% to $ 56,947.33.