As stocks slipped, further consolidation was seen as the dollar firmed | – #stocks #slipped #consolidation #dollar #firmed

NEW YORK/LONDON, Feb 6 (Reuters) – Global stock markets fell and dollars strengthened on Monday, USACentral banks are struggling to slow inflation amid relatively strong economic growth after a steady job market suggested interest rates would remain higher for longer.

Investors, last Friday USAin january emerging market assets and low-yielding currencies such as the yen suffered after a blockbuster jobs report in May and a strong bounce in the services sector dollars they made it more expensive.

Government bonds, which usually perform well when there’s a dash for safe havens, are selling under intense pressure. 10 annual Treasury yields rose to a one-month high of 3.655%, Germany’s 10 annual bond yield was 2.306%.

With the Federal Reserve seeing interest rates rising next year and staying above 5%, investors are expecting the economy to cool later this year. USA is among the market evaluating the interest rate cuts of the central bank.

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“The market is incredibly ready to look to 2023, and that’s the wild card here,” said Hirtle Callaghan & Co. in West Conshohocken, Pennsylvania. Brad Conger, deputy chief investment officer of the company.

“The market is expecting a slowdown, incomes are going down, but the market is expecting a bullish year in 2024,” he said. “This is not an economy that’s going to collapse right away.”

Federal Reserve Bank of Atlanta President Raphael Bostic told Bloomberg News on Monday that january Given the unexpectedly strong reading on job growth in May, the Fed may have to raise borrowing costs higher than previously expected.

The Fed’s target rate futures will now peak above 5.1% in June or July before falling to 4.83% in December, more than 30 basis points higher than last week’s strong data, as Fed officials previously predicted.

MSCI’s equity indices in 47 countries (.MIWD00000PUS) 1.12%, pan-Europe The STOXX 600 index (.STOXX) decreased by 0.78%.

US-listed shares of Chinese firms fell as Sino-US relations soured over a suspected Chinese spy balloon shot down by the US military over the Atlantic Ocean. Heavyweights Alibaba Group Holding, JD.com Inc and Pinduoduo Inc ( PDD.O ) fell between 0.8% and 1.9%.

Turkey and after a massive earthquake in Syria that killed more than 3,000 people Turkey The lira has reached a new record level. The currency sank last week after data showed a worrying rise in monthly consumer inflation.

Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan, said this year’s rally in stocks is a soft bearish and bearish one. inflation driven by hopes, but strong labour market questions this perspective.

“Investors will have to come to terms with the fact that interest rates will remain higher for a longer period of time, and it is still unlikely that the Fed will cut rates this year,” he said.

“People don’t actually spend less without fear of losing their jobs. They’re not changing their behavior enough to start bringing inflation down.”

On Wall Street, the Dow Jones Industrial Average (.DJI) was down 0.1%, the S&P 500 (.SPX) was down 0.61%, and the Nasdaq Composite (.IXIC) was down 1%.

Japan’s current deputy, Masayoshi Amamiya, who is seen as less of a monetary policy hawk than his predecessor, has been appointed as the head of the central bank. offer after the reports he made dollars It hit a three-week high of 132.90 against a weaker yen.

The dollar rose to an almost one-month high of 132.85 yen, while the euro fell 0.64% to $1.0726.

Beijing accidentally US weather The drama over the balloon, which he said was a civilian airship entering his space, has further strained the already tense relations.

Chinese shares fell on Monday, while the offshore yuan hit a one-month low against the dollar. It is down almost 2% in three days.

“The incident is definitely a negative headline for the market,” said Yuan Yuwei, manager of hedge fund Water Wisdom Asset Management.

The strength of the dollar has also washed over emerging markets.

The Turkish lira fell to a record low of $18.85, taking much of the risk-off sentiment, while the Thai baht last traded against the US currency. 20 showed the biggest one-day drop in a year.

In Touch Capital Markets chief currency analyst Piotr Matys said that earthquake It increases the uncertainty before the elections in Turkey, which are likely to be held in May.

Matys, “President Erdogan Turkey The Fed is likely to remain in tightening mode longer than markets currently expect, with the Central Bank firmly stating that it expects to cut interest rates,” he said.

A number of Fed officials are set to speak this week, including Chairman Jerome Powell on Tuesday, and Bosticin offer the tone it makes can be a hawk. Europe Central Bank and Bank of England politicians will also speak.

Oil as markets assess a rebound in demand from China with supply concerns and fears of slow growth in major economies curbing consumption prices rose in a choppy trade.

US crude oil futures rose 72 cents to $74.11/barrel, while Brent crude futures rose $1.05 to $80.99.

Gold has risen, with investors believing in the precious metal’s safe-haven appeal as worries about an economic slowdown persist.

US gold futures rose 0.2% to settle at $1,879.50.

Edited by Deepa Babington

Our standards: Thomson Reuters Trust Principles.

2023-02-07 02:05:53
Source – reuters

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