New York: On Friday, global stock markets fell again, and US Treasury yields rose as cautious investors worried about how an imminent US rate hike would affect the economy.
A warning from JP Morgan Chase and Company, the largest bank in the United States, that profitability may fall below its medium-term target has hit Wall Street in a new way.
In the United States, bargain hunting towards the end of the day continued, and stock prices helped reduce losses. The Dow Jones Industrial Average fell 0.56%, the S & P 500 ended flat, and the Nasdaq Composite rose 0.59% to return to the black. [.N]
Nicholas Colas, co-founder of DataTrek, said: research.
“The market is still wondering what the consequences of their decision will be,” Chorus said.
Benchmark 10-year Treasury yields jumped to 1.7859%, rebounding to a two-year high of 1.8080% earlier this week, in line with expectations of rising interest rates. The Treasury yield reached a high of 0.9730% for two years, the last level seen in February 2020. [US/]
European bond yields also rose in volatile trading as investors focused on central bank tightening, but the sharp drop in German benchmark 10-year yields earlier this week was the biggest week in 10 weeks. Recorded the next decline. [GVD/EUR]
Meanwhile, in Asia, the five-year yield on Japanese government bonds has jumped to its highest level since January 2016, and Reuters is discussing how quickly the Bank of Japan policymakers can start the final rate hike. After reporting, the yen rose.
Such a move could occur even before inflation reaches the bank’s 2% target, sources said.
The dollar, which had been sluggish for three days, finally stabilized on Friday as investors bet that expectations of a rate hike had already been priced in the currency.
The dollar index, which measures the greenback against a basket of six currencies, rose 0.34% to 95.167, a further drop from this week’s two-month lows. [USD/]
The dollar’s rebound dragged the euro down 0.34% to 1.14135.
Sterling also fell 0.22% to 1.36780, taking a break after hitting a two-and-a-half-month high in this week’s rally.
Friday’s GDP data showed that Britain’s economy grew faster than expected in November and its production eventually exceeded that level before the country entered the first COVID-19 blockade. ..
Asian stocks fell overnight after Fed Governor Lael Brainard became a superlative central banker in March, indicating that the Fed would raise rates.
Other Fed officials have shown a willingness to raise interest rates after this week’s data show that US consumer prices have skyrocketed 7% year-on-year.
Oil futures rose again against the backdrop of weak stock markets and were expected to rise in the fourth week, boosted by supply constraints. [O/R]
Brent crude oil futures rose 1.9% to a two-and-a-half-month high of $ 86.44 a barrel. US West Texas intermediate crude was up 2.6% to $ 84.28. Brent and US futures have entered the overbought territory for the first time since late October.
Rising bond yields weighed heavily on unyielding gold, with spot gold falling 0.31% at $ 1,816.53 per ounce. [GOL/]
“What we feel in the market here is clearly the impact of monetary tightening,” said Guillaume Paillat, multi-asset portfolio manager at Aviva Investors.
Peyrat, who expects to raise Fed rates at least four times this year, said the tightening cycle will begin in March with “almost completed transactions.”
“It will be a matter of profits that will be important in the next few days,” he said.
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Stocks stumble and yields soar in interest rate outlook.Oil rally
Source link Stocks stumble and yields soar in interest rate outlook.Oil rally