Stocks fall little before Powell testimony: Markets Wrap

On Wednesday, stocks and treasuries made little movements as investors remained cautious ahead of Federal Reserve Chair Jerome Powell's appearance, in which he is anticipated to reaffirm that there is no pressing need to decrease interest rates.

The Stoxx 600 index in Europe declined by less than 0.1 percent, while futures for the S&P 500 and Nasdaq 100 gained a little ground. The yield on 10-year Treasuries notes was flat after dropping six basis points to 4.15% the day before. Not much changed when it came to a monetary measure.

There are indications that the US stock rise is coming to a halt due to worries over extremely high valuations, therefore on Wednesday, Powell will go to Capitol Hill to give his semiannual testimony before Congress. The budget announcement and details of the bond issuance plan are the main points of interest for traders in the UK markets.

Gold and Bitcoin prices, meanwhile, conveyed conflicting signals regarding the risk appetite in global markets. Following a brief record-breaking session on Tuesday—the first such event in almost two years—the cryptocurrency price began to increase again.

Expectations for US rate reduction and geopolitical concerns drove gold to a record high the previous day, and it was little altered after that. Alibaba Group Holding Ltd. and Tencent Holdings Ltd., two of China's largest digital companies, helped Hong Kong's stock market recover on Wednesday, while Inc. jumped ahead of its fourth-quarter results. After being volatile all day, mainland Chinese stocks finally sank.

More information on the Chinese government's push to increase consumption might be revealed at a news conference with high-ranking officials on Wednesday. Reporters will hear from the heads of the ministries of commerce and finance as well as the newly appointed head of securities regulation, in addition to Pan Gongsheng, governor of the central bank.

Meanwhile, the largest bank in Japan is preparing for the possibility that the central bank could end its zero interest rate policy in two weeks. Compared to the swap market, which assigns a probability of 50% to Bank of Japan Governor Kazuo Ueda altering policy this month, Mitsubishi UFJ Financial Group Inc.'s assessment is far more conclusive.

In an impromptu meeting, Egypt's central bank raised interest rates and announced it will let the market decide the exchange rate, sending the pound tumbling. New multi-billion dollar loans from the International Monetary Fund are being sought by the country in an effort to alleviate a severe lack of hard cash.