In the U.S., the Senate came closer to passing a $1 trillion infrastructure package, though it still has to go through the House.Investors were still assessing whether Friday's strong U.S. payrolls report would take the Fed a step nearer to winding back its stimulus.
"What we're seeing is a little bit of early profit-taking on the back of fear that tapering will come in earlier in September," said Sebastien Galy, senior macro strategist at Nordea Asset Management. "But as you can see, it has little impact because the effect of a better economy far outweighs the substitution effect of higher interest rates."
However, the pace of tapering was still up in the air and would decide when an actual rate increase comes, he said. The Fed is currently buying $120 billion of assets a month.On the plus side, stocks have been mostly underpinned by a robust U.S. earnings season. BofA analysts noted S&P 500 companies were tracking a 15% beat on second-quarter earnings with 90% having reported.
In the currency markets, the dollar index moved 0.02% higher, with the euro off 0.03% to $1.1732, its lowest since early April.The U.S. currency's broad rally came as U.S. Treasury yields spiked to three-week highs on the back of the strong jobs data and early Fed taper speculation.Our Standards:Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
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