Dollar inches up ahead of Powell speech; China data knocks oil

Data showed China's exports and imports both fell sharply in January-February, reflecting a slowdown in the global economy and weak domestic demand, knocking Chinese blue chips <.CSI300>, while the offshore Yuan edged up against the dollar.

Crude shipments into China fell in January and February, stirring concern about demand in the world's largest importer, which weighed on the oil price.

Beyond China, investor focus remains on the US interest rate outlook and what Powell may say.

"Over the last few weeks, data out of the US has been far more resilient than expected, fueling bets that the Fed will have to raise rates beyond what was communicated earlier and rates will stay elevated for longer as well," strategists at Saxo Bank said.

"Most Fed members have also sounded hawkish, raising the prospect of a shift higher in March dot plot. If a similar message is conveyed by Chair Powell, we could see US Treasury yields rising again and the dollar reversing back to an uptrend," they said.

The MSCI All-World index of global shares was marginally in positive territory at 641.60 points, close to Monday's two-week highs.

Yields on benchmark 10-year Treasury notes, which have more than doubled in the last 12 months, were last down 5 basis points on the day at 3.93%.

Yields on the two-year note, which are more sensitive to changes in interest rate expectations, were down 4 bps at 4.857%. Two-year yields have more than trebled in the last year to almost 5%, their highest since 2007.

Money markets show traders believe US rates will peak just shy of 5.5% by September, from a range of 4.50-4.75% right now.

The expected peak was closer to 4.7% just a month ago.