Global shares made guarded gains on Monday, encouraged that investors were weathering last week's disappointing U.S. jobs report but with enough event risk to keep the mood cautious.
Wall Street was expected to pull back around 0.2 percentwhen trading resumes, after enjoying its best two-day run in four months at the end of last week despite a second month running of uncertain job numbers.
The dollar <.DXY> and benchmark safe-haven bonds, including U.S. Treasuriesand German Bunds , were all maintaining tight ranges as investors looked ahead to a string of risk events later this week.
Top of the list, the new head of the Federal Reserve, Janet Yellen, delivers her first testimony to the House of Representatives on Tuesday and the Senate on Thursday. Markets are hoping for assurances that policy will stay loose for a long time to come.
The dollar <.DXY> steadily recouped after a soft start to the European session as questions remained over Yellen's stance.
It was last trading at $1.3633 to the euroand was buying 102.20 yen , after bobbing as high as 102.41 in Asia.
European markets pared back already modest gains. Weakness on Spanish <,IBEX>, Italian <.FTMIB> and Portuguese <.PSI20> bourses offset modest gains in France <.FCHI> and Britain <.FTSE>.
Emerging-market tensions were also back in focus after credit rating downgrades late on Friday for Turkey and Ukraine, two of the countries most under fire in markets.
Turkey's liraand its main stock market <.XU100> suffered their biggest falls in a week. Losses in Ukrainian assets were limited by its imposition of capital controls from Friday.
The Hungarian forintsaw one of the biggest falls in the region, dropping 1 percent as mainly political concerns weighed on sentiment.
"The reason you often find the forint on the back foot is that it does still have very large external funding requirement, and the other issue is this monetary-policy tail risk," said Christian Lawrence, an emerging markets. "The entire monetary policy council is appointed by the government."
Fed chair Yellen will be able to offer her own reading of last week's jobs report before lawmakers this week, which could give markets a fresh steer on the pace of stimulus withdrawal.
Analysts generally assume she will stick to the script of recent policy meetings, reiterating that a gradual decline in asset buying is likely as long as the economy continues to improve as assumed. [ID:nL2N0LC1MU]
"We expect her to state that tapering is not on a pre-set course and the committee will adjust course as needed, particularly if the expected firming in growth and gains in payrolls do not persist," Barclays analysts said in a note.
Treasuries were little changed. Yields on 10-year notes were a shade higher from their finish on Friday at 2.69 percent as U.S. trading began.
In commodities, oil prices lost momentum, having initially extended their recent gains as cold weather across the United States kept eating into heating fuel stocks.
U.S. crudemade an early six-week peak at $100.46 a barrel but could not force its way past the December high at $100.75 and fell back to $99.70. Brent futures gave up 21 cents of last week's gains to stand at $109.35 a barrel.
Spot goldwas also firm at $1,274 an ounce. It still faces stiff resistance up to $1,278.
In Asian trading, Japan's Nikkei <.N225> led the way with a rise of 1.3 percent. Shanghai <.SSEC> also added 1.7 percent after its recent sell-off.
Source: Reuters
Wall Street was expected to pull back around 0.2 percent
The dollar <.DXY> and benchmark safe-haven bonds, including U.S. Treasuries
Top of the list, the new head of the Federal Reserve, Janet Yellen, delivers her first testimony to the House of Representatives on Tuesday and the Senate on Thursday. Markets are hoping for assurances that policy will stay loose for a long time to come.
The dollar <.DXY> steadily recouped after a soft start to the European session as questions remained over Yellen's stance.
It was last trading at $1.3633 to the euro
Emerging-market tensions were also back in focus after credit rating downgrades late on Friday for Turkey and Ukraine, two of the countries most under fire in markets.
Turkey's lira
The Hungarian forint
"The reason you often find the forint on the back foot is that it does still have very large external funding requirement, and the other issue is this monetary-policy tail risk," said Christian Lawrence, an emerging markets. "The entire monetary policy council is appointed by the government."
Analysts generally assume she will stick to the script of recent policy meetings, reiterating that a gradual decline in asset buying is likely as long as the economy continues to improve as assumed. [ID:nL2N0LC1MU]
"We expect her to state that tapering is not on a pre-set course and the committee will adjust course as needed, particularly if the expected firming in growth and gains in payrolls do not persist," Barclays analysts said in a note.
In commodities, oil prices lost momentum, having initially extended their recent gains as cold weather across the United States kept eating into heating fuel stocks.
U.S. crude
Spot gold
