Image: Reuters Berita 24 English - Tuesday saw uneven trading in global stocks as bond yields and oil prices fell on concerns about the sta...
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| Image: Reuters |
Berita 24 English - Tuesday saw uneven trading in global stocks as bond yields and oil prices fell on concerns about the state of the world's economies and the possibility of additional central bank tightening.
The dollar has recently roared to two-decade highs against a variety of currencies, while the euro fell to within a hair's breadth of parity with the dollar, enhancing its position as the safe-haven currency for investors concerned about the prospects for the economy.
The global MSCI stock index fell 0.22 percent while the pan-European STOXX 600 index increased by 0.49 percent.
Due to the persistent impact of rising natural gas prices on the local economy, the conflict in the nearby Ukraine, and the European Central Bank's tardiness in hiking interest rates, the euro has been especially vulnerable.
The euro increased 0.12 percent to $1.0051 while the dollar index dropped by 0.148 percent. The yen was close to its worst level in more than two decades.
As the earnings season gets underway this week with reports from companies like JPMorgan Chase & Co., Citigroup Inc., and Wells Fargo & Co., among others, analysts are moderating their profit forecasts.
According to a closely monitored measure released on Tuesday, investor sentiment in Germany declined in July.
Investors will be looking for hints on the outcome of the Fed's upcoming policy meeting before the pre-meeting blackout period, so economic data, particularly U.S. consumer inflation on Wednesday, and remarks from Federal Reserve officials will be in focus later this week.
A strong inflation figure would put additional pressure on the Fed to quicken the rate at which interest rates are raised, which is already aggressive.
According to Ross Mayfield, an investment strategy analyst at Baird, "it is a continued risk-off tone in markets and the anticipation that while perhaps some of the pain is priced in, you still have inflation expected to accelerate tomorrow and the Federal Reserve with a lot of room to go on rate hikes."
On Wall Street, the Nasdaq Composite fell by 0.13 percent, the S&P 500 lost 0.15 percent, and the Dow Jones Industrial Average gained 0.16 percent.
While Japan's Nikkei fell 1.77 percent, MSCI's largest index of Asia-Pacific shares outside of Japan ended 1.04 percent lower.
Following the discovery of a highly transmissible Omicron subvariant, investors are also keeping an eye on how an increasing number of Chinese cities, particularly the business hub Shanghai, are implementing additional COVID-19 limits to prevent the spread of new illnesses.
As the largest pipeline delivering Russian natural gas to Germany enters a 10-day annual maintenance period, the rising cost of energy in Europe is another key concern. Investors are worried that the shutdown may last longer due to the conflict in Ukraine, severely limiting the supply of gas to Europe and sending the already fragile euro zone economy into recession.
After falling back below 3 percent overnight as investors bought safe-haven Treasuries after a sell-off on Wall Street, the yield on 10-year Treasury notes was down 3.1 basis points to 2.960 percent.
The two-year U.S. Treasury yield was down 3.1 basis points at 3.039 percent, which normally fluctuates in tandem with interest rate predictions.
Despite worries about a limited supply, growth concerns were hurting oil prices.
Tuesday saw a dramatic decline in oil prices because to the strong dollar, COVID-19 limitations in China, the world's largest petroleum importer, which drain demand, and concerns about a slowdown in the global economy. [O/R]
Spot gold prices were stable, falling 0.4 percent to $1,726.89 per ounce.
The last time the values of cryptocurrencies changed, bitcoin was down 0.9 percent to $19,769.95.
