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Shares bounce, profits fall on Powell’s unnoticed Reuters

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© Reuters. PHOTO OF THE FILE: A man works on the Tokyo Stock Exchange after the market opened in Tokyo (Japan) on October 2, 2020. REUTERS / Kim Kyung-Hoon

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By Herbert Lash and Carolyn Cohn

NEW YORK / LONDON (Reuters) – On Wednesday, global stock prices rose and bond yields fell as US Federal Reserve Chairman Jerome Powell reassured investors that inflation will rise temporarily, albeit for a while.

Powell confirmed in congressional testimonies that inflation would remain based on the Fed’s 2% and that the U.S. economy was “still far” from the levels the Fed wanted to see before it cut its stimulus support.

The notes prepared by Powell would encourage investors who were concerned about inflation data to signal the start of the cuts that eased them, said Michael Arone, chief investment strategy State Street (NYSE 🙂 Global Advisors Boston. He noted that U.S. producer prices rose in June to a year-over-year gain of more than 10-1 / 2.

“Yesterday’s CPI and today’s PPI were above expectations and indicated that inflation remains warm,” he said. “Powell has also stood firm in the face of that.”

The yield on the 10-year Treasury note fell 5.1 points to 1.3643%, easing the dollar and rising Wall Street shares.

MSCI’s global index rose 0.2% after hitting Tuesday’s record high of 728.77. The broad index across Europe fell by 0.06% and other European equity indices are also lower.

Wall Street rose 0.27%, rose 0.39% and advanced 0.52%.

Overnight in Asia, the MSCI’s broadest Asia-Pacific stock index fell outside Japan by 0.25% as Chinese chips fell 1.15%. It fell by 0.38%.

The Bank of Canada held a key overnight interest rate at a record 0.25% on Wednesday, saying it would cut net government bond purchases every week by C $ 2 trillion ($ 1.6 trillion) from $ 3 trillion.

The Canadian dollar was lower at $ 1.2499 per dollar.

The New Zealand dollar rose 0.92% as markets neared a rise in interest rates after the central bank announced on Wednesday that it would unexpectedly end its bond-buying program from next week.

The green dollar versus the six-currency basket follows a 0.414% drop from 92.39.

The euro rose 0.42% to $ 1.1824, while the yen fell 0.56% to $ 109.9900.

President Joe Biden’s administration continues to push for a tax boost to boost the U.S. economy. On Tuesday night, Democrats in the U.S. Senate Budget Committee reached an agreement on a $ 3.5 trillion infrastructure investment plan with the goal of including it in a budget resolution that will be debated this summer.

German 10-year Bund yields did not change slightly by -0.293%, after Germany sold 3.392 billion euros, an increase of 0.00% over the 10-year Bund.

Oil data fell by a 3% drop in crude imports in China in the first half of the year from January to June. [O/R]

It fell $ 0.41 to $ 76.08 a barrel. It fell $ 0.55 to $ 74.7 a barrel.

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