* Focus back on macro as earnings season recedes
* MSCI AxJ dips marginally from two-year peak
* Dollar steady as traders wait for Powell speech
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook
SINGAPORE, Aug 26 (Reuters) - Bonds sold off and stocks took
a breather on Wednesday as investors waited to hear from the
Federal Reserve about its next moves to support the U.S.
economic recovery, while oil jumped to a five-month peak as a
hurricane disrupted output in the Gulf of Mexico.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged down 0.1%, retreating slightly from a
two-year high hit on Tuesday. Japan's Nikkei .N225 was off
0.1%.
Futures pointed to a similarly steady start in Europe, with
Euro STOXX 50 futures STXEc1 up 0.1% and FTSE futures FFIc1
up 0.2%. S&P 500 futures ESc1 were flat.
The U.S. dollar steadied in currency trading, while the
yield on U.S. 10-year debt US10YT=RR rose to 0.7150%, close to
testing a two-month top, as the bond market begins to price in
an eventual return to inflation and growth.
Fed Chairman Jerome Powell is due to speak at a virtual
Jackson Hole symposium on Thursday and investors think he could
outline a more accommodative approach to inflation which would
open the door to easier policy for a long time to come.
"There's positioning ahead of that, we're starting to see a
decent steepening of the curve," said Chris Weston, head of
research at brokerage Pepperstone.
"The market knows the world is healing," he said. "I think
it's pretty clear that the world is improving better than what
most people had positioned themselves for in fixed
income...maybe for once the equity market was right."
In commodity markets oil prices hung on to overnight gains
as U.S. producers closed offshore output and battened down as
Hurricane Laura drives toward the Gulf Coast. O/R
Producers evacuated 310 offshore facilities and shut 1.56
million barrels per day of crude output, 84% of Gulf of Mexico's
offshore production - near the 90% outage that Hurricane Katrina
brought 15 years ago. Brent crude futures LCOc1 sat by a five-month high touched
on Tuesday at $46.02 a barrel, up 16 cents. U.S. crude futures
LCOc1 were steady at $43.35 a barrel, though analysts believe
the lift is temporary.
"As Hurricane Laura fades, oil markets will once again
return to the grim reality of challenging demand growth and
significant excess capacity," said Commonwealth Bank of
Australia analyst Vivek Dhar in a note.
"While global oil demand is expected to trend higher from
here, total oil consumption isn't expected to return to
pre-COVID levels until 2022."
WAITING FOR JAY
An apparent easing in Sino-U.S. tensions, with a productive
call this week on trade, has improved sentiment, though economic
data has been mixed.
Consumer confidence dropped to a more than six-year low in
the United States this month, data showed on Tuesday, but that
came with a boom in home sales.
In currency markets, stronger-than-expected business
sentiment in a German survey helped the euro.
The common currency EUR=EBS dipped to $1.1810 on Wednesday
as investors fretted about the possibility that Powell does not
sound as dovish as investors expect - particularly on the issue
of inflation targeting.
"Dovish expectations seem to be quite loaded for this event,
and the dollar may bounce if Powell disappoints the doves," said
OCBC Bank currency strategist Terence Wu.
The yen JPY= was last at 106.37 per dollar. Gold XAU=
dipped to $1,919 an ounce.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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