| LONDON, March 17
LONDON, March 17 World stocks traded near a
one-month low on Monday and the dollar and German bonds held
firm as investors worried about the economic impact of possible
western sanctions on Moscow after Crimea voted to separate from
U.S. Treasury yields ticked higher from a 1-1/2 week low set
last week. Friday's data showing a record drop in foreign
governments' holdings of Treasuries underscored the appetite of
emerging countries like Russia for cashing in their holdings to
defend their currencies.
British Foreign Minister William Hague said he expects EU
ministers to agree sanctions including travel bans and asset
freezes against Russian and Crimean individuals following
Investors are worried that sanctions, which are likely to
hit Russia's already flagging economy, may also weigh on
European companies that are exposed to Russia.
"The market to some extent expects sanctions now. It
depends on what kind of sanctions and (Russia's) reaction to the
sanctions to see if we can talk of a de-escalation of the crisis
or not," said Piet Lammens, a KBC strategist in Brussels.
Alpari market analyst Craig Erlam said he expected "a long
drawn out stand-off."
The MSCI world equity index, which tracks
shares in 45 countries, was largely steady on the day, trading
near a one-month low hit on Friday.
German 10-year Bund yields, the benchmark for
euro zone borrowing costs, were flat at 1.55 percent, not far
from Friday's eight-month lows of 1.506 percent.
U.S. Treasury yields stood at 2.6795 percent,
having fallen to 2.6450 percent on Friday.
The Fed said its holdings of U.S. securities kept for
overseas central banks fell by $106.142 billion in the week
ended March 12, to stand at $3.206 trillion, bringing the total
on deposit with the Fed to the lowest level since December 2012.
European stocks and the broader Euro STOXX 600
both rose around 0.7 percent. Emerging stocks
added a quarter percent.
U.S. crude oil fell 0.2 percent to $98.68 a barrel.
The dollar rose 0.1 percent against a basket of six major
China's yuan eased against the dollar after the
central bank in Beijing doubled the currency's daily trading
band as part of its commitment to liberalise the market.
Yet the currency moved in a relatively narrow range,
reflecting market views that the People's Bank of China will
seek to limit currency swings at a time when markets fret over
China's cooling growth and the quality of corporate debt.
The euro was under pressure ahead of final euro zone
inflation data for February at 1000 GMT. A Reuters poll forecast
no revision to the annual rate of 0.8 percent reported, but
there is a risk it could be revised down, keeping alive concerns