(Updates after U.S. market open, changes byline, previous
* World stocks drop; Yellen, Fischer speeches eyed
* French poll dimming Le Pen chances helps stocks and euro
* U.S. yields flat, dollar in rate hike commentary wait
By Sinead Carew
NEW YORK, March 3 World equity markets edged off
record highs and the U.S. dollar retreated on Friday after two
days of gains as cautious investors held back amid mounting
expectations for a U.S. interest rate hike in March.
U.S. Treasury yields were flat after a week of hawkish
comments from several Federal Reserve officials and ahead of two
Fed officials' appearances on Friday that may provide clues on
the direction of monetary policy. The implied probability of a
March rate hike has surged to 74 percent, from just 30 percent
at the start of the week.
U.S. stocks were down amid investor caution ahead of
speeches by Fed Chair Janet Yellen and Vice Chair Stanley
Fischer on Friday.
With indexes bolstered this week by increased bets on a rate
hike soon, any divergence from Yellen would raise questions,
said Mark Luschini, chief investment strategist at Janney
Montgomery Scott in Philadelphia.
"There's a certain caution in advance of her speaking. I
would not be surprised with the market reacting with more vigor
subsequent to her speaking," said Luschini.
At 10:53 a.m. ET, the Dow Jones Industrial Average
was down 20.58 points, or 0.1 percent, at 20,982.39, the S&P 500
lost 3.26 points, or 0.14 percent, to 2,378.66 and the
Nasdaq Composite dipped 7.67 points, or 0.13 percent, to
Europe's benchmark STOXX 600 fell 0.1 percent but
was also on track to end the week higher.
The MSCI global stock index was down 0.2
Benchmark U.S. 10-year Treasury yields were flat in early
North American trading after hitting a two week high earlier on
Friday, ahead of the Fed officials' appearances.
Benchmark 10-year US10YT=RR notes were little changed in
price to yield 2.489 percent. Yields touched 2.507 percent
during European trading, the highest since Feb. 15.
The dollar index, which measures the greenback's strength
against a basket of six major currencies, eased about 0.3
percent but was poised for its fourth straight weekly gain.
"The markets are looking for validation for the increase in
Fed rate hike expectations from comments from Fed Chair Yellen.
That's the key issue for the market right now," said Shaun
Osborne, chief FX strategist, at Scotiabank in Toronto.
The euro rose 0.4 percent to $1.0566 and France's
bluechip CAC 40 index rose 0.6 percent, as far-right
candidate Marine Le Pen's chances in the country's presidential
"We saw a peak of panic in February when the focus was on Le
Pen," said DZ Bank strategist Christian Lenk. "It's always been
clear that the odds of Le Pen becoming the next president were
quite low and now we see confirmation of that in the polls."
Oil prices rose as the dollar fell, though gains were held
in check by unchanged Russian output for February, a sign of its
weak compliance on a global deal to cut supplies.
Benchmark Brent crude futures were up 0.7 percent at
$55.46 a barrel after closing down 2.3 percent in the previous
session. WTI futures gained 16 cents, or 0.7 percent, to
(Additional reporting by Saqib Iqbal Ahmed and Dion Rabouin in
New York, Vikram Subhedar in London, Dhara Ranasighe and Wayne
Cole in SYDNEY; Editing by Bernadette Baum)