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A new super dollar rises, markets fall and the euro bleeds

A new super dollar rises, markets fall and the euro bleeds

The world stocks fell on Tuesday due to caution before the next monetary policy meeting of the Federal Reservewhile windfall profits at Europe’s biggest bank boosted financials.

He Australian dollar spiked after the central bank surprised markets with an unexpected interest rate hike, while in US markets short-term government bond yields rose sharply after the Treasury Department said it might stay without the cash you need to pay your bills in early June.

The Fed is expected to raise rates by a quarter point on Wednesday, but with so much anxiety surrounding the push and pull over the government debt limitAs well as the stability of the banking sector following the failure of a third US lender in two months, money markets show that investors think this will be the last hike.

“No one is going to want to do too much before we get to that FOMC (Federal Open Market Committee) decision. It’s about placing positions before that meeting,” said Michael Brown of TraderX. .

“Equities seem to be pulling back a bit today, the fact that we haven’t been able to convincingly break out of 4,200 (in the S&P 500) is a bit worrying for the bulls and that may strengthen the dollar marginally,” he added.

S&P futures were down 0.1% and leading European stocks were down. The pan-European STOXX 600 index fell 0.2% as gains in the banking sector – after HSBC rose 5.5% on windfall profits and the reinstatement of dividend payments – were offset by losses in the oil and gas sector after BP’s decision to cut its share buyback programme.

In the currency markets, The dollar was stable against a basket of six major currencies, while the euro fell 0.1% to $1.097.

In general, the atmosphere in the markets is tense. US President Joe Biden has summoned the top four congressional leaders to the White House, after Treasury Secretary Janet Yellen said her department could run out of money to cover its obligations as soon as 1 of June.

Meanwhile, the sale of First Republic Bank’s assets to JPMorgan Chase brought some stability to shares of other regional lenders such as PacWest and Citizens Financial, which were down only modestly, 0.3-0.5%.

In commodities, Brent crude futures were down 0.6% at $78.80 a barrel, after falling below $80 a day earlier on concerns about the global economy. Copper was improving for the fourth day in a row, having lost more than 2% the previous week.

By Amanda Cooper, Reuters Agency

Source: Ambito

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