Global shares slip, dollar firm as Fed outlook dominates
By Richard Hubbard
LONDON (Reuters) - China's plan to broaden economic reforms failed to give a lift to world shares on Tuesday as higher U.S. government bond yields and growing talk the Federal Reserve will soon scale back its stimulus weighed on sentiment.
U.S. stock index futures pointed to further weakness ahead on Wall Street where investors were looking for policy clues from a number of Fed speakers. .N
China's leaders promised to deepen economic reforms and let markets play a bigger role in resource allocation in a new policy blueprint unveiled at the end of a four-day meeting of key officials from the ruling Communist Party.
"They are looking to break away from government control, allowing the markets to take the lead," said Dong Tao, chief regional economist for Non-Japan Asia at Credit Suisse.
"This is a revolutionary philosophy, by Chinese standards."
However, the government communique contained little to shift the market's attention away from its preoccupation with the timing of the Fed's next policy steps, prompting world shares .MIWD00000PUS to edge lower after two days of gains.
The speculation that the Fed could soon begin to taper its $85 billion-a-month in bond buying has grown since last week's surprisingly strong U.S. jobs data, driving the dollar closer to 100 yen and lifting it toward a two-month peak against a basket of major currencies .DXY.
RATE RISES Continued...