KazPost

Kazakhstan News
Saturday, Apr 20, 2024

Global Markets – Stocks limp toward biggest weekly fall of the year

Global Markets – Stocks limp toward biggest weekly fall of the year

World shares limped toward their biggest weekly fall of the year on Friday, though investors took heart from a brief dip in government bond yields as the incoming Bank of Japan chief ruled out an early end to its super-easy monetary policy, according to Reuters.
There was focus too on the first anniversary of Russia’s invasion of Ukraine, which Moscow terms a “special military operation,” as calls for peace, but also warnings about a wider escalation, came from both Washington and Beijing.

Europe’s markets couldn’t maintain what had been a positive start with the pan region Euro Stoxx 600 dipping 0.1 percent, Wall Street futures pointing to a red start there later and MSCI’s main worldwide index down 0.2 percent for the day and 1.7 percent for the week.

Europe’s moves were partly offset by a pause in this month’s sharp rise in global borrowing costs — a reversal of January’s trend.

Overnight, Kazuo Ueda, who will take over as governor of the Bank of Japan in April, had told a confirmation hearing that ultra-low interest rates were still needed to support Japan’s fragile economy, warning of the dangers of responding to cost-driven inflation with monetary tightening.

Europe’s benchmark bond yields dipped back from 2011 highs as Germany, the bloc’s industrial power-house said its economy shrank by slightly more than initially predicted in the fourth quarter of 2022.

The dollar was higher again too ahead of US personal consumption expenditures price index data for January, the Federal Reserve’s preferred inflation measure. The index is expected to be up 0.4 percent from a month earlier, compared with 0.3 percent the previous month.

Close Brothers Asset Management’s Chief Investment Officer, Robert Alster, said markets were upbeat about the strength of consumer spending in many of the major economies at the moment but also wary about inflation staying higher for longer and extending the rise in interest rates.

“That is why were are all hanging on each data point,” Alster said. “There is a feeling it is going to be volatile, a bit like being cautiously optimistic skating on thin ice” he added. “We are virtually neutral now on all asset classes.”

Unwelcome Anniversary

Wall Street was pointing lower again having ended a topsy-turvy Thursday in positive territory for the first time in five sessions, although it too remains on course for its worst week of the year.

The expectations that US interest rates might need to rise for longer meant the dollar index, which measures the top world currency against six of its main peers, was up 0.25 percent at a seven-week high of 104.859. On Thursday, an unexpected fall in new claims for unemployment and a revised uptick in the fourth-quarter PCE price index, suggested some lasting strength in the world’s largest economy.

“The US dollar index should extend its rise toward 106 if today’s US PCE deflators lift the US Treasury 2Y yield above the 4.5-4.75 percent Fed Funds Rate range,” said analysts at DBS Bank.

A year on from Russia sending its troops into Ukraine, the focus remained the loss of life and long-term geopolitical implications, although the spillovers of the war have had a major impact on financial markets.

Aaron Dunn, co-head of value equity at Eaton Vance, said the most obvious had been the sharp increase in oil and gas and agricultural prices when the war broke out. Notably though, most of those moves have been completely reversed.

“You have basically retracted a fair amount of the gains in most of the energy markets in the back half of 2022,” Dunn said, highlighting that the slump in natural gas prices following a mild winter meant gas use was now replacing coal again in Europe.

“That has helped the global economic picture,” he explained. “The big question is now the top line, the economic performance, and in that respect China’s reopening will play an outsized role in the direction we go from here.”

The overnight comments from BOJ head-elect Ueda on Japan’s easy-money policy had seen Japan’s Nikkei share index close up 1.3 percent, while its five-year government bond yield eased to 0.235 percent.

Ten-year Japanese bonds didn’t trade on Friday due to thin liquidly, after breaching the upper limit of the BOJ’s policy cap for two straight days. But the yen turned choppy as data also showed core consumer inflation hitting a 41-year high, keeping pressure on the BOJ to phase out its stimulus program.

Meantime, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.3 percent, for a hefty weekly drop of 2.5 percent.

In particular, Chinese blue chips tumbled 1 percent and Hong Kong’s Hang Seng Index dropped 1.6 percent after comments from US officials that Washington would increase the number of troops helping train Taiwan’s forces.

In the bond markets, the key Treasury yield, or the cost for the US government to borrow in the international debt markets, eased to as far as 3.8590 percent before climbing back to 3.9101 percent.

Benchmark European yields flip-flopped too, dipping after Germany, the bloc’s industrial power-house, said its economy shrank by slightly more than initially predicted in the fourth quarter of 2022.

They popped up again ahead of US trading though with Germany’s 10-year government bond yield last up at 2.49 percent having hit a 2011 high earlier in the week after stronger-than-expected euro zone PMI data.

In the oil market, Brent crude futures rose 0.8 percent to $82.84 while US West Texas Intermediate crude was also up 0.8 percent at $75.99.

Gold was fractionally higher at a spot price of $1,824.89 per ounce although it was on course for a fourth straight weekly drop.
Newsletter

Related Articles

KazPost
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
An Ominous Shift in Warfare: Western Powers Risk War Crimes and Violate International Norms with Cluster Bomb Supply to Ukraine
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
Corruption in the European Parliament - Business as usual
UK Crypto and Stablecoin Regulations Become Law as Royal Assent is Granted
Paris Suburb Grapples with Violence as Curfew Imposed: Saint-Denis Residents Express Dismay and Anger
A Delaware city wants to let businesses vote in its elections
Alef Aeronautics Achieves Historic Milestone with Flight Certification for World's First Flying Car
Google Blocked Access to Canadian News in Response to New Legislation
French Politicians Advocate for Pan-European Regulation on Social Media Influencers
×