London — World stocks paused breathtakingly on Friday, but sentiment was broad and cautious as markets assessed the Fed’s policy tightening and the economic risks of the Russian war in Ukraine. For the first time in 2022, it is expected to rise for the second consecutive week.
U.S. stock futures rose slightly in the last full week of the quarter, while European stocks set a slight weekly loss driven by financial and energy stocks after a two-week rise. ..
Global Flash PMI data for March this week showed that the global economy is largely resilient, but investors are becoming increasingly bearish on the economic outlook. For example, Barclays lowered its 2022 global economic growth forecast this week to 3.3%, while traders increased their short-term bets.
Germany’s business morals deteriorated in March due to rising gasoline prices and worsening supply chain problems due to driver shortages, but are not facing a first-quarter recession due to the Ukrainian war, IFO Institute said Friday. Said to.
The global bond market remains one of the worst selling in recent memory, but market volatility gauges have signaled various signals. Nickel, facing market volatility, rose 9% on Friday after reaching a trading limit of 15% per day in the previous two sessions.
BofA strategists said US Treasuries were the largest year since 1949, despite a global negative-yielding government debt pile of less than $ 2 trillion from more than $ 18 trillion at the height of the pandemic. He said he was ready for the loss.
Kenneth Bronx said, “With the end of the quarter and the end of the fiscal year in Japan next week, we have a clearer understanding of the resilience of risk assets and currencies to the bear market for bonds and the prospect of accelerated tightening of the FRB in May. I think we can do it. ” FX strategist at Societe Generale in London.
Benchmark US 10-year Treasury yields led to the sale of the broader bond market held at 2.34 percent on Friday after reaching a peak of nearly three years above 2.41 percent this week. Yields have risen 75bps in the last two weeks as traders scrambled to correct interest rate hike expectations.
Rising bond yields benefited the US dollar, with greenbacks rising to highs in late 2015, while the Japanese yen was 122 yen, but some profits declined.
Not enough
The dollar index’s rise on Friday has stopped, but it has been well on its way to a slight weekly rise. The euro currency was slightly higher at $ 1.108.
“EUR-USD is pretty stagnant around 1.10, and a higher-than-expected PM survey across the eurozone in March isn’t enough to provoke buying motivation,” UniCredit analysts said. rice field.
The market expects a total rate hike of 190 basis points for the rest of the year after the US 25 bps rate hike last week. Investors have allocated an 88 percent chance of a 50bps rate hike in March.
Charles Evans, Governor of the Federal Reserve Bank of Chicago, is the latest U.S. policymaker and will be incorporated into U.S. psychology on Thursday to curb high inflation before it becomes equal. He said he needed to raise interest rates “in a timely manner.” Difficult to remove.
Demand for safe assets such as gold and the Swiss franc remained resilient as the conflict in Ukraine showed no signs of slowing.
Spot gold remained rising at $ 1,959 per ounce and was stable that day.
Oil continued to fall slightly on Friday as the United States and its allies considered releasing more oil from storage to cool the market. Brent crude fell 1.3% to $ 117.78 a barrel and US crude fell 1.6% to $ 110 a barrel, but historical standards were still very high.
Cycut Chatterjee
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