* 10-year U.S. Treasury yields reach 1.33% before reversing
course
* MSCI world index falls 0.1%
* Bitcoin climbs above $51,000
* Brent crude prices at 13-month high
(Updates with midday U.S. markets activity; changes byline,
dateline, previous MILAN)
By Saqib Iqbal Ahmed
NEW YORK, Feb 17 (Reuters) - A gauge of global equity
markets pulled back on Wednesday from the record high hit in the
previous session, as concerns about a possible rise in inflation
tempered optimism around a vaccine-led global economic recovery.
Benchmark 10-year Treasury yields reached a one-year high to
trade near pre-pandemic levels, before reversing course even as
data pointed to a strengthening economy, while the dollar gained
ground against a basket of major currencies.
Data on Wednesday showed U.S. retail sales rebounded sharply
in January after households received additional pandemic relief
money from the government, suggesting a pick-up in economic
activity after the restraints imposed by a fresh wave of
COVID-19 infections late last year. Other data showed inflation pressures building up at the
factory gate, with producer prices posting their biggest gain
since 2009 in January.
The Fed has pledged to pin interest rates near zero until
inflation rises to 2% and looks set to exceed that goal.
That super-easy stance, coupled with the Biden
administration's proposed $1.9 trillion spending bill for
pandemic relief, has some analysts warning of a coming surge in
inflation.
"While the new package may be large, it will add stimulus to
an economy still below potential, and the spending will be
spread out over a couple of years," said Mark Haefele, chief
investment officer, UBS global wealth management in Zurich.
"So while a near-term rise in inflation is likely, we expect
the Fed to look past that and keep rates on hold."
The MSCI's global stock index .MIWD00000PUS was down 0.78%
at 679.74. The index touched a record intra-day high of 687.26
on Tuesday, before erasing gains to snap an 11-day winning
streak. On Wall Street, the Nasdaq fell, weighed down by a slide in
big technology firms as investors rotated out of growth stocks,
while awaiting the release of minutes from the U.S. Federal
Reserve's January meeting later in the day.
Investors expect central banks to keep monetary policy
loose, and minutes later on Wednesday from the U.S Federal
Reserve's January meeting are expected to reinforce that view.
The Dow Jones Industrial Average .DJI fell 68.01 points,
or 0.22%, to 31,454.74, the S&P 500 .SPX lost 26.17 points, or
0.67%, to 3,906.42, and the Nasdaq Composite .IXIC dropped
220.45 points, or 1.57%, to 13,827.05.
European shares retreated from near one-year highs as
concerns about a possible rise in inflation tempered optimism
about a vaccine-led global economic recovery, while Kering
tumbled after sales at its Gucci brand fell more than expected.
The pan-European STOXX 600 index .STOXX was 0.79% lower.
The U.S. dollar rose as rising Treasury yields and upbeat
economic data helped the greenback gain ground against a basket
of world currencies. The dollar index =USD climbed 0.33% to
reach a more than 1-week high. Bitcoin charged to a record high on Wednesday, a day after
the cryptocurrency vaulted the $50,000 hurdle, even as analysts
warned about the sustainability of such prices amid elevated
volatility. Oil prices rose, underpinned by a major supply disruption in
the southern United States this week where a winter storm
pounded Texas. Brent crude LCOc1 was trading at $63.59 a barrel, up
0.38%, after rising to $64.75 a barrel, its highest since
January 2020, earlier in the session. U.S. West Texas
Intermediate (WTI) crude CLc1 futures gained 0.22% to $60.18 a
barrel.
Spot gold XAU= was down 1.2% at $1,772.77 an ounce.
Copper prices eased as the stronger dollar prompted
profit-taking, but low inventories and optimism about demand
prospects due to stimulus and growth supported sentiment.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
Crawling back https://tmsnrt.rs/2LYM8Il
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