* U.S. bond yields ease, taking dollar with them
* Chicago Fed Evans says two more rate hikes likely this year
* Oil prices tick up on hopes of extended OPEC-led output curb
MSCI's broadest index of
While Asian shares have been supported by signs of strong
global economic growth, concerns about protectionism cast a
shadow after financial leaders of the world's biggest economies
dropped a pledge to keep global trade free and open, acquiescing
to an increasingly protectionist
"Any fiscal spending by the Trump administration will not come until August at earliest and probably much later. So any economic benefit of that will show up only next year," said a senior trader at a European bank.
"So the markets are gradually pricing that in, winding back their initial rally after the elections."
Although Trump promised in early February to deliver a "phenomenal" tax plan within a few weeks, no such details have been released yet.
"U.S. stocks valuations are getting really expensive, so I
expect the market to be capped for now. That also means Japanese
shares are unlikely to gain further," said
Expectations that the Federal Reserve will have to step up rate hikes to counter inflationary pressure from Trump's stimulus are also waning after the Fed dropped no hints of an acceleration in credit tightening last week.
Chicago Federal Reserve President
He said that two more interest rate hikes this year were likely, disappointing investors who had anticipated rates to be increased more quickly. Evans's comments helped to bring down the 10-year U.S. Treasuries yield to 2.461 percent, its lowest level in two weeks. It last stood at 2.479 percent.
Lower yields undermined the greenback's allure, softening
the dollar to three-week lows near
The euro ticked up to
"At the moment, worries about the election have subsided a
bit after the Dutch elections. But I expect the market to become
more nervous near the election, given last year's experiences
(with Brexit and the U.S. elections)," said
The dollar's index against a basket of six major currencies stood at 100.26, after hitting a six-week low of 100.02 on Monday.
The spectre of slower U.S. rate hikes has been helping high-yielding currencies.
The Australian dollar traded at
The South African rand has gained 4.0 percent since then to a near 1-1/2-year high while the Brazilian real rose 3.2 percent.
Oil prices rose in
Prices for front-month Brent crude futures, the
international benchmark for oil, gained 0.4 percent to
OPEC members increasingly favour extending the output curb
beyond June to balance the market, sources within the group
said, although they added that this would require non-OPEC
members such as
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