Gold prices fell on improving sentiment and US Treasury yields rose from an eight-week low as investors weighed in on how quickly the Federal Reserve could raise interest rates in the coming months, including the outlook on growth. is a major concern.
Fed Chair Jerome Powell said the US Fed would go ahead with a plan to raise rates this month to overcome high inflation, but the war in Ukraine has made the outlook “highly uncertain” for US policymakers, Fed Chair Jerome Powell said. he said.
Powell told a congressional committee that he was “willing to propose and support a 25 basis-point rate hike” when policymakers meet in two weeks. Comments eased widely held expectations before the attack of 50 basis-point growth.
“There was a widespread belief that they were going to make a big splash to get everyone’s attention,” said Jack Ablin, chief investment officer at Crescent Capital Management.
“The fact that the Fed was not expected to tighten this much, and then Powell confirmed that doubts this morning gave rise to this enthusiasm,” he said.
State Street global macro strategist Marvin Loh said the market is struggling because of the Ukraine conflict, what happens with growth in Europe and the US.
“This rise in energy prices makes it a challenge for the Fed because, on the one hand, it drives up inflation,” Loh said.
“But, generally speaking, when you get these jumps in energy prices, there’s a deflationary component attached to it, because it inhibits growth elsewhere,” he said.
After a week into the war, Russia has yet to achieve its goal of overthrowing the government of Ukraine. Ukrainians said a battle broke out in the port of Kherson, the first major city Moscow claimed to have seized.
All 11 S&P sectors advanced, led by financials, and major European indices ended the day in a sea of green, with commodity-linked stocks making huge gains.
The pan-European STOXX 600 index rose 0.90%, rebounding from earlier declines, and a worldwide gauge of MSCI shares closed up 0.93%.
On Wall Street, the Dow Jones Industrial Average gained 1.79%, the S&P 500 1.86% and the Nasdaq Composite gained 1.62%.
Euro zone bond yields rose after falling dramatically a day earlier, with Germany’s real yield hitting a record low as traders gauged the economic fallout of the Ukrainian invasion.
Germany’s 10-year yield in the revaluation, the benchmark for the euro area, posted its biggest daily decline since 2011 on Tuesday. The market is part of those moves, with Germany’s 10-year yield rising 8.1 basis points to 0.009%. The yield on 10-year Treasury notes rose 18.3 basis points to 1.894%.
Euro zone inflation hit another record high last month, intensifying a policy dilemma for the European Central Bank, which needs to express a sense of calm amid war-related market turmoil and respond to rising price pressures. need to be given.
Crude rose again on a wave of disinvestment from Russian oil assets by major companies and expected supply crunch in the market for months to come. [O/R]
US crude futures rose $7.19 to $110.60 a barrel, the highest level since 2011, while Brent settled at $112.93 at $7.96.
Aluminum prices hit a new record high as investors raised concerns that logistics difficulties due to tighter sanctions on major producer Russia would block supplies of the metal.
Three-month aluminum traded at a record high of $3,580 a tonne on the London Metal Exchange.
US gold futures were down 1.1% at $1,922.30 an ounce.
David Meager, director of metals trading at High Ridge Futures, said there was little need for safe havens.
“We have seen the stock markets stabilize.
The ruble fell to a record low in Moscow trade and the stock market remained closed as Russia’s financial system faltered under the weight of Western sanctions.
The ruble fell 4.7% to 106.02 against the dollar, from 110.0 earlier, a record low. This year it has lost almost a third of its value.
Shares of Van Eck’s battered Russia ETF, which has been drawing interest from traders in comparison to last year’s frenzy in so-called meme stocks, fell 13%.
Foreign investors are effectively stuck with their holdings of ruble-denominated bonds after the Russian central bank imposed a temporary moratorium on coupon payments and a major foreign ‘settlement’ system that stopped accepting Russian assets.
Analysts at JPMorgan said in a note that sanctions on Russia “significantly increased the likelihood of the Russian government’s hard currency bond default.”
The dollar index rose 0.026%, the euro fell 0.04% to $1.1122.
The Japanese yen weakened 0.53% to 115.52 per dollar.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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