Asia Stocks Swing While Dollar Gains Before Yellen Speaks

(Bloomberg) — Asian stocks traded near a five-month high and the dollar strengthened before Federal Reserve Chair Janet Yellen speaks to lawmakers and as Greece’s creditors review a list of debt-reduction policies. Australian bonds gained and U.S. oil traded below $ 50 a barrel.

The MSCI Asia Pacific Index was little changed by 11:53 a.m. in Tokyo, with about the same number of stocks rising as falling. Futures on the Standard & Poor’s 500 Index fluctuated after the U.S. gauge finished less than 0.1 percent from a record. Australia’s 10-year bond yield fell, tracking a rally in U.S. Treasuries. New Zealand’s dollar weakened on lower inflation expectations and the yen fell. West Texas Intermediate crude was at $ 49.55 a barrel.

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Greece presented creditors with a draft of policies to implement a Feb. 20 deal for continued funding. An official said the list would be given to euro-area members for discussion Tuesday. With a gauge of consumer confidence estimated to retreat today, Federal Reserve Chair Janet Yellen begins two days of testimony to Congress as investors watching for clues on the timing of an interest-rate increase.

“Fed Chair Yellen’s Congressional testimony is likely to reveal little new information about monetary policy as the political theater focuses on political agendas,” BNP Paribas SA analysts led by Paul Mortimer-Lee wrote in a note today. Regarding Greece’s proposals “there is a marginal risk of some controversy over whether the list is ‘‘sufficiently comprehensive to be a valid starting point’’ — as the eurogroup would have it — for completing the current bailout.”

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Kiwi Inflation

The Bloomberg Dollar Spot Index climbed 0.1 percent to 1,169.88, extending yesterday’s 0.2 percent increase. The greenback was higher against 14 of 16 major peers, gaining at least 0.2 percent versus the yen, Australian dollar and Swiss franc.

The yield on 10-year New Zealand notes fell three basis points to 3.33 percent as the kiwi retreated to 74.8 U.S. cents. New Zealand’s two-year ahead inflation expectations dropped to 1.8 percent, according to a central bank survey. That’s the least since the second quarter of 1999.

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Australian bonds due in a decade paid 2.54 percent, four basis points less than yesterday, while similar Japanese securities were little changed.

U.S. debt gained a second day after Greece said it would deliver to euro-area finance ministers on Tuesday morning its list of commitments required to extend the bailout for four months. Treasuries were at the cheapest levels against their Group of Seven peers in eight years, something Federal Reserve Chair Yellen’s comments may indicate is justified or not.

Summer Hike

Yellen “should leave intact a pretty high probability of at least a summer rate hike and maybe as soon as June,” said Sean Callow, a currency strategist at Westpac Banking Corp. in Sydney. “We do expect that the U.S. dollar will emerge somewhat stronger from her testimony.”

The euro slipped 0.1 percent to $ 1.1325 today, having weakened 6.3 percent this year versus the dollar. Approval of the Greek plans would offer a four-month reprieve for the country. At the same time, Prime Minister Alexis Tsipras must try to avoid defections within his anti-austerity Syriza party after it won power on pledges to take back control of Greece’s finances.

The measures are first subject to validation by the International Monetary Fund, the European Central Bank and the European Commission, the institutions that were known as the troika and from which Tsipras told voters Greece would break free. A draft was under discussion Monday evening, an official from the institutions said. The person asked not to be named because the deliberations are private.

BHP Rally

Seven of the 10 industry groups on the MSCI Asia Pacific Index retreated today. The gauge fell as much as 0.2 percent. A 2.6 percent gain by BHP Billiton Ltd. was responsible for pushing a subindex of materials producers higher for a ninth straight day after the world’s biggest miner reporting earnings that beat estimates.

BHP was the main support for the S&P/ASX 200 Index, which climbed 0.1 percent toward a more-than 6 1/2-year high in Sydney. Japan’s Topix Index was little changed after closing at the highest since December 2007.

Hong Kong’s Hang Seng Index slipped 0.5 percent as HSBC Holdings Plc plunged. Europe’s largest bank fell 3.5 percent to HK$ 69.50, the lowest level since September 2012, after reporting earnings that missed estimates and regulatory probes.

Taiwan Semiconductor Manufacturing Company Ltd. jumped 2 percent in Taipei, leading the island’s benchmark stock gauge toward its highest close since 2007.

Europe Assets

Italian and Spanish securities surged yesterday, and Portuguese 10-year yields touched a record low, as the accord avoided a cash crunch that threatened to push Greece out of the currency bloc.

The Stoxx Europe 600 Index advanced for a fifth day to extend the highest level since 2007. The U.K.’s FTSE 100 Index surpassed a record close in intraday trading before closing little changed as lower-than-projected profit at HSBC pushed the stock lower. Greece’s ASE Index slipped 4.5 percent last week. The market was closed on Monday for a holiday.

Six of the 10 main S&P 500 groups retreated yesterday, with phone shares losing 0.6 percent to lead declines. U.S. stocks posted their longest streak of weekly gains since the beginning of December as Greece reached a deal on Feb. 20 to extend its bailout program and investors speculated the Fed will keep rates lower for longer even as the economy shows signs of picking up speed.

West Texas Intermediate crude oil for April delivery settled at $ 49.45 a barrel on Monday, having slipped 2.7 percent. Brent, the benchmark for more than half of global oil, climbed 0.5 percent to $ 59.20 a barrel today after tumbling 2.2 percent in London.

Oil fell as fields in eastern Libya resumed pumping to Hariga port after a pipeline was repaired, according to state-run National Oil Corp. Oman, the biggest Middle Eastern oil producer that’s not a member of OPEC, is boosting crude output to as much as possible with the global price rout over, said Salim Al Aufi, undersecretary of the oil and gas ministry.

To contact the reporter on this story: Nick Gentle in Hong Kong at [email protected]

To contact the editors responsible for this story: Nick Gentle at [email protected] John McCluskey

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