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Stocks start week with gains as dollar slides

Sydney - Asian equities rose, extending a two-week global rally, after US stocks posted strong gains on Friday and Treasuries steadied. The dollar slipped against most major currencies as investor focus returns to US monetary policy with two appearances this week from Federal Reserve chairperson Jerome Powell.

Shares from Sydney to Hong Kong advanced and US stock futures edged higher. Powell will speak before the House Financial Services Committee on Tuesday and the Senate Banking Committee two days later to give his Humphrey-Hawkins testimony.

The dollar declined as Treasury yields retreated below 2.90%. The yen firmed to a one-week high as Bank of Japan Governor Haruhiko Kuroda said the central bank has no plan to overhaul its current form of easing. German bunds were little changed and gold climbed.

Bond traders are pricing less than the three quarter-point rate hikes that Fed officials signaled as likely this year. While the slump in stocks at the start of February may have been in part fueled by concerns tied to the 10-year yield approaching 3%, many strategists have said they felt equities could continue to rise until reaching 3.5% or 4%.

Powell “looks like he is on track to keep the Yellen strategy - so gradual rate rises this year,” Stephen Halmarick, head of global markets research at the Commonwealth Bank of Australia, told Bloomberg TV in Sydney.

Elsewhere, oil steadied as Saudi Oil Minister Khalid Al-Falih said OPEC and its allies may ease output curbs in 2019 to avoid creating instability. Bitcoin slid below $9 500.

Here are some key events scheduled for this week:

• Bank of Korea’s policy decision and briefing on Tuesday.

• Powell testifies before a House panel on Tuesday. He’ll discuss the Fed’s Semi-Annual Monetary Policy Report and the state of the economy. Powell returns on March 1 before a Senate committee.

• Companies announcing earnings this week include: Vale, BASF, Standard Chartered, Bayer, Lowe’s, Galaxy Entertainment, Anheuser-Busch InBev, Peugeot, WPP, and London Stock Exchange.

• UK Prime Minister Theresa May delivers a speech on Britain’s relationship with the European Union after Brexit.

• A barrage of data is expected out of Japan including retail sales and industrial production on Wednesday, capital spending on Thursday and unemployment and household spending on Friday.

• In China, the official and Caixin purchasing managers’ indices on Wednesday and on Thursday respectively may show growth momentum slowed slightly in February, though the signal may be clouded by the holidays.

These are the main moves in markets:

Stocks

• The MSCI Asia Pacific Index rose 0.8% as of 4:14 pm Tokyo time.

• Topix index rose 0.8%.

• Hong Kong’s Hang Seng Index rose 0.7%.

• Kospi index rose 0.3%.

• Australia’s S&P/ASX 200 Index rose 0.7%.

• Futures on the S&P 500 Index rose 0.1%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%.

• The Japanese yen rose 0.3% to 106.54 per dollar.

• The euro rose 0.2% to $1.232.

Bonds

• The yield on 10-year Treasuries fell one basis point to 2.86%.

• Japan’s 10-year yield fell less than one basis point to 0.052%.

Commodities

• West Texas Intermediate crude rose 0.2% to $63.67 a barrel.

• Gold rose 0.8% to $1 339.62 an ounce.

• LME copper rose 0.9% to $7 157.00 per metric ton.

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