By Sinéad Carew and Nell Mackenzie
NEW YORK/LONDON (Reuters) -MSCI’S global equities gauge slipped on Monday while the euro eased after hitting a multi-week high against the dollar earlier in the day as investors digested France’s election surprise.
In the U.S. Treasury yields rose ahead of key inflation data and the kickoff of the corporate earnings season.
Federal Reserve Chair Jerome Powell’s appearance in Congress on Tuesday and Wednesday was also being keenly awaited, with the potential to provide clues on the prospects for interest rate cuts by the U.S. central bank.
The closely monitored U.S. consumer price report is due on Thursday. June’s inflation rate is expected to slow to 3.1% year-over-year, from 3.3% in May, and the core measure is estimated by economists to stay steady at 3.4%.
The week will end with the kick-off of the second-quarter earnings season with reports from major U.S. banks Citigroup, JP Morgan and Well Fargo on Friday.
“Investors are positioning as they expect a continuation of this rally for the rest of the year,” said Bruce Zaro, managing director at Granite Wealth Management in Plymouth, Massachusetts.
Investors are also looking for “a continuation of Powell’s recent dovish comments” when he speaks to Congress, Zaro said.
On Wall Street, at 1:05 p.m. the Dow Jones Industrial Average fell 70.28 points, or 0.18%, to 39,305.59, the S&P 500 lost 1.47 points, or 0.03%, to 5,565.72, and the Nasdaq Composite gained 24.37 points, or 0.13%, to 18,377.12.
On Friday the S&P notched its third record close in a row. An advance of the tech-heavy Nasdaq on Monday would mark its fifth straight record close.
After four closing record’s in a row, MSCI’s gauge of stocks across the globe fell 0.27 point, or 0.03%, to 817.32. In Europe, the STOXX 600 index fell 0.03%.
On the currencies side, the euro eased slightly against the dollar after earlier touching its highest level since June 12. In France, a leftist alliance unexpectedly took the top spot in Sunday’s parliamentary runoff election, delivering a setback to Marine Le Pen’s nationalist, euroskeptic National Rally party.
The weaker-than-expected showing for the far right was something of a relief for investors, though they have concerns the left’s plans could unwind many of President Emmanuel Macron’s pro-market reforms.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, gained 0.01% at 104.96, with the euro down 0.07% at $1.0828.
Against the Japanese yen, the dollar strengthened 0.01% to 160.73.
In Treasuries, U.S. 10-year yields ticked higher after falling in the last three sessions with a focus on Powell’s appearance before Congress and inflation data later in the week.
The yield on benchmark U.S. 10-year notes rose 0.7 basis point to 4.28%, from 4.273% late on Friday.
The 30-year bond yield rose 0.1 basis point to 4.4703% from 4.469% late on Friday.
The 2-year note yield, which typically moves in step with interest rate expectations, rose 2.5 basis points to 4.6243%, from 4.599% late on Friday.In commodity markets, oil futures slipped following four weeks of gains as supply disruption worries eased on hopes of a ceasefire deal in Gaza, but the potential impact of Hurricane Beryl on supplies kept the slide in check.
U.S. crude lost 0.71% to $82.57 a barrel and Brent fell to $85.99 per barrel, down 0.64% on the day.
In precious metals, gold prices slipped as investors booked profits after Friday’s soft U.S. jobs data pushed prices to a more than one-month high on hopes the Fed would begin cutting interest rates in September.
Spot gold lost 1.41% to $2,357.68 an ounce. U.S. gold futures fell 1.49% to $2,352.90 an ounce. [GOL/]
(Reporting by Sinéad Carew, Nell Mackenzie; Editing by Mark Potter, Christina Fincher and Leslie Adler)
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