GLOBAL MARKETS-World stocks dip from record peak, dollar firm ahead of Fed minutes

  • 7/7/2021
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* European stocks up 0.58%, S&P futures up 0.16% * Euro near three-month low vs dollar * German 30-year bond yield lowest since April LONDON, July 7 (Reuters) - World stocks dipped on Wednesday from recent record highs and the dollar edged towards three-month peaks as investors awaited minutes from the Federal Reserve’s latest meeting to see if they confirm a hawkish turn in U.S. monetary policy. Markets are nervous about riskier assets before the release of the June policy minutes, which will likely show how serious members are about tapering their asset buying and how early rate hikes could begin. “If the minutes are really pushing towards tapering, we are going to see gold rise, the dollar rise and equities fall,” said Giles Coghlan, chief currency analyst at HYCM. The MSCI world stocks index dipped 0.11% to 723.35, after hitting a record high of 726.11 early on Tuesday. S&P 500 futures gained 0.16% after the index dropped 0.20% overnight. Nasdaq futures rose 0.28% after the tech index hit another closing record high. Wall Street had been unsettled by a survey on Tuesday showing a slight cooling in the red-hot U.S. services sector, though at 60.1 the ISM index was still historically high. European stocks gained 0.58% after a weak session on Tuesday. German stocks rose 0.83% and Britain’s FTSE 100 was up 0.5%. Expectations of a hawkish Fed tone helped the dollar rally against a basket of currencies to 92.546, up from a low of 92.003 on Tuesday and moving closer towards recent three-month highs. The euro edged down to $1.1817, near its lowest in three months, after data on Tuesday showed investor sentiment in Germany fell by much more than expected in July. German industry output fell 0.3% month on month in May, below analysts’ expectations. “Slowing economic momentum in Germany and the euro zone would point towards the ECB considering a tapering of its asset purchasing programme as part of PEPP (Pandemic Emergency Purchase Programme) at an even later stage than expected, in particular against the background of the spreading Delta variant,” Commerzbank analysts said in a note. The dollar was steady against the safe-haven yen, holding at 110.62. The skittish mood helped Treasuries extend their recent rally with yields on U.S. 10-year notes dropping almost 8 basis points overnight to their lowest since February. Yields recovered slightly to 1.3363%. Germany’s 30-year bond yield hit its lowest since early April at 0.218%. A Chinese crackdown on tech companies was also dampening sentiment. Hong Kong stocks hit near six-month lows and were down 0.4%, while U.S.-listed ride-hailing company Didi Global Inc shed more than 20% in New York. Alibaba Group

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