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Stocks lose ground while bond yields rise with rates in focus

MSCI's international equity index was lower on Friday while the dollar index hardly changed after five days of gains as investors waited on ideas about the future path for rate of interest from next week's U.S. Federal Reserve conference.

In U.S. Treasuries, standard 10-year U.S. Treasury yields increased to a two-and-a-half week high and were on track for their fifth straight gain. Investors are wagering Federal Reserve chair Jerome Powell will indicate a pause in policy alleviating after an expected 25-basis-point rate cut next Wednesday.

The Fed is grappling with inflation staying stubbornly above its 2% annual target. Information launched on Thursday showed higher-than-expected U.S. manufacturer prices in November.

Friday's information showed U.S. import rates hardly rose in November as increases in food and fuel costs were partly balanced out by decreases somewhere else, thanks to a strong dollar.

The market is presuming that Powell cuts next week and then stops briefly. I believe that's the ideal presumption due to the fact that we're seeing a tension between the inflationary information and the labor-market data, said Matt Rowe, head of portfolio management and cross-asset strategies at Nomura Capital Management.

While surging chipmaker Broadcom was a huge increase for the Nasdaq, Wall Street lost ground after early gains. European stocks broke a three-week winning streak, as investors sought clearness on the euro zone's speed of policy relieving for 2025 amidst concerns about economic development and a potential trade war.

At 11:26 a.m. EST (1626 GMT) the Dow Jones Industrial Typical fell 3.07 points, or 0.01%, to 43,908.44, the S&P. 500 fell 8.97 points, or 0.15%, to 6,042.32 and the. Nasdaq Composite fell 59.91 points, or 0.30%, to. 19,842.92.

MSCI's gauge of stocks around the world fell. 3.25 points, or 0.37%, to 865.23 while Europe's STOXX 600. index fell 0.62%.

In fixed earnings, the yield on benchmark U.S. 10-year notes. increased 5.1 basis points to 4.375%, from 4.324% late on. Thursday while the 30-year bond yield increased 4.6 basis. points to 4.5935%.

The 2-year note yield, which normally moves in. action with Fed interest-rate expectations, rose 4 basis indicate. 4.226%, from 4.186% late on Thursday.

In currencies, the dollar was headed for its biggest weekly. gain in a month on the possibility of slower U.S. rate cuts next. year. Sterling fell after a surprise contraction in UK economic. activity while the euro clawed back some recent losses in the. wake of the European Reserve bank's rate cut on Thursday.

The dollar index, which measures the greenback. versus a basket of currencies consisting of the yen and the euro,. rose 0.03% to 106.99. The euro was up 0.27% at $1.0495.

Against the Japanese yen, the dollar strengthened. 0.67% to 153.64 on the day, having actually risen all week as traders. scaled back bets on a rate trek from the Bank of Japan next. week. Sources said the BOJ is leaning towards keeping rates. steady.

In energy markets, oil prices rose and were heading for. their first weekly increase because completion of November, as extra. sanctions on Russia ratcheted up supply concerns, while a surplus. outlook weighed on markets.

U.S. crude increased 1.1% to $70.80 a barrel and Brent. increased to $74.03 per barrel, up 0.83% on the day.

In precious metals, gold fell after bullion hit a more than. five-week high in the previous session, while rates tracked for. a weekly increase on bets for a Fed rate cut next week.

Spot gold fell 0.82% to $2,659.45 an ounce. U.S. gold. futures fell 0.96% to $2,661.70 an ounce.

Earlier both China's blue-chip stocks and Hong. Kong's Hang Seng lost more than 2% after the Central. Economic Work Conference did not use details on brand-new stimulus. steps.

(source: Reuters)