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GLOBAL MARKETS-Equities mixed as investors eye earnings; yen on intervention watch
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GLOBAL MARKETS-Equities mixed as investors eye earnings; yen on intervention watch
Apr 24, 2024 2:38 PM

(Updated at 5:05 p.m. (2105 GMT))

By Chris Prentice and Ankur Banerjee

NEW YORK/LONDON, April 24 (Reuters) - U.S. and European

shares finished mixed on Wednesday ahead of more corporate

earnings this week, and the yen was mired near 34-year lows,

keeping traders wary of intervention from Japan.

An auction of a record $70 billion worth of five-year U.S.

Treasury notes on Wednesday helped to push bond yields higher,

pressuring equities.

MSCI's gauge of stocks across the globe

rose 1.31 points, or 0.17%, to 759.46.

On Wall Street, the S&P 500 closed slightly higher after

choppy trading.

Europe's broad STOXX 600 index closed down 0.5% as

financial stocks dragged the index off a more than one-week

peak.

The S&P 500 gained 1.08 points, or 0.02%, to 5,071.63

and the Nasdaq Composite gained 16.11 points, or 0.10%,

to 15,712.75. The Dow Jones Industrial Average fell 42.77

points, or 0.11%, to 38,460.92.

"This week is getting back to market fundamentals and

earnings. At least temporarily, we are sidestepping geopolitics

which have been impacting markets in the last two weeks," said

Samy Chaar, chief economist at Lombard Odier.

Spot gold continued its slide, trading down 0.26%

to $2,315.82 an ounce. U.S. gold futures settled 0.2%

lower at $2,338.4.

DATA DIVERGENCE

Purchasing Managers Index surveys on Tuesday showed overall

business activity in the euro zone and in Britain expanded at

their fastest pace in nearly a year, while business activity

cooled in the U.S.

That divergence helped the euro nudge above $1.07

in Asia trade, its highest in more than a week.

"For once, US-eurozone divergence in data has come to the

benefit of euro/dollar," said Francesco Pesole, currency

strategist at ING, in a note.

"(Though) hard data - inflation and employment above all -

has been the real drag on the pair so far, so caution is

warranted when it comes to rallies prompted by activity surveys

like PMIs."

U.S. gross domestic product and March personal consumption

expenditure data due later this week will be crucial for the

dollar and for investors' attempts to gauge the path of U.S.

rates.

Traders expect the Federal Reserve to start easing rates in

September and ending the year with 42 basis points of cuts, down

from previous bets for 150 bps.

"One thing is fore sure: the Fed is not raising rates. I

believe they want to tighten financial conditions by

communicating a further distance is required for cuts, but they

can do those cuts at whatever speed is necessary," said Jamie

Cox, managing partner for Harris Financial Group in Richmond,

Virginia.

INTERVENTION ZONE

The drastic shift in rate expectations has elevated Treasury

yields and lifted the dollar in the past few weeks, with

pressure felt particularly in Asia.

In the latest illustration, Indonesia's central bank

delivered a surprise rate hike on Wednesday, stepping up efforts

to support the rupiah currency.

The Japanese yen weakened 0.09% against the greenback

at 154.95 per dollar and touched its lowest since 1990 ahead of

the Bank of Japan's two-day policy meeting that concludes on

Friday.

A senior official of Japan's ruling party told Reuters they

were not yet in active discussion on what yen levels would be

deemed worthy of market intervention.

The benchmark 10-year Treasury note rose five

basis points to 4.6459%.

In commodities, Brent crude futures fell 40 cents,

or 0.45%, to settle at $88.02 a barrel, while U.S. West Texas

Intermediate crude futures slipped 55 cents, or 0.66%, to

$82.81.

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