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GLOBAL MARKETS – Stocks fall and bond yields rise as Waller shatters hopes

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By Chuck Mikolajczak

NEW YORK, Nov 14 (Reuters) – A gauge of global stocks eased on Monday after posting its biggest weekly percentage gain in two years last week and U.S. bond yields rose as a Reserve official Fed has dampened hopes that the central bank might be about to suspend its tightening path.

Stocks rallied last week and US Treasury yields fell after consumer price data indicated that stubbornly high inflation may finally start to ease.

But Federal Reserve Governor Christopher Waller said Sunday that while the central bank may consider slowing the pace of rate hikes at its next meeting, that shouldn’t be seen as a “softening” in the fight. to lower inflation, and while the data was “good news”, it was “just a data point”.

“The market expects the Fed to continue its hawkish rate rhetoric,” said Peter Cardillo, chief economist at Spartan Capital Securities.

“That could change once we get more confirmation on inflation in December. Once they (the Fed) raise rates to 50 (bps), it’s possible they’ll point to slower rates.”

On Wall Street, the S&P 500 edged lower after posting its biggest weekly percentage gain since June last week, weighed down by declines in megacap growth companies such as Microsoft and Amazon which have struggled this year as the Fed was on the way to raising rates. .

The Dow Jones Industrial Average rose 25.23 points, or 0.07%, to 33,773.09, while the S&P 500 fell 5.22 points, or 0.13%, to 3,987.71 and the Nasdaq Composite fell 78.59 points, or 0.69%, to 11,244.74.

The pan-European STOXX 600 index rose 0.27% and the MSCI gauge of stocks across the world lost 0.09%.

Investors will get another glimpse of inflation when the US Producer Price Index is released on Tuesday.

Benchmark 10-year bonds rose 6.4 basis points to 3.893% from 3.829% on Thursday evening. The bond market was closed for the Veterans Day holiday on Friday.

The two-year yield rose 10.5 basis points to 4.431% from 4.326%

In contrast, dovish comments from European Central Bank policymaker Fabio Panetta and Cypriot policymaker Constantinos Herodotou helped push European bond yields lower, although short-term rates remained close to recent multi-year highs.

Germany’s 2-year government bond yield fell 1.9 basis points to 2.111% from 2.13%, after climbing to 2.252% last week, its highest level since 2008.

After its biggest weekly percentage decline since March 2020 last week, the dollar index rose 0.15%, with the euro falling 0.21% to $1.033.

U.S.-listed Chinese stocks gained on reports that regulators have asked financial institutions to provide more support to struggling property developers amid signs the government may start easing some of its tough policies regarding COVID-19. Shares of e-commerce company rose 1.61%.

US President Joe Biden on Monday met Chinese leader Xi Jinping in person for the first time since taking office on the sidelines of the Group of 20 (G20) summit, with the two stressing the need for better dialogue between their nations and both parties establishing a mechanism for more frequent communications.

In cryptocurrencies, bitcoin was last down 1.41% at $16,518 after falling below $16,000 for the first time since Thursday as investors continue to assess the fallout from last week’s collapse of crypto exchange FTX.

(Reporting by Chuck Mikolajczak; Additional reporting by Ankika Biswas; Editing by Jan Harvey)

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