Key for the markets: world investors react to the Fed’s message on rates

Key for the markets: world investors react to the Fed’s message on rates

The global markets experience losses this Friday, and European stocks retreat from three-week highs, while the dollar maintains a stable price after the hawkish comments of the president of the Federal Reserve, Jerome Powellwhich dispel expectations of an increase in interest rates.

The pan-European STOXX 600 index decreases by 0.8%. The German DAX fell 0.7%, while the French CAC 40 and the British FTSE lost 0.9%.

The gloomy sentiment spreads globally as MSCI’s broadest index of global shares falls 0.4%, hitting a one-week low of 659.86, on track for its fourth session of losses and a decline. weekly close to 0.5%.

Several Fed officials, including Powell, The day before, they expressed their uncertainty in the fight against inflation and indicated that they will tighten the policy even more if necessary.

Powell’s comments, along with a weak $24 billion 30-year Treasury bond auction, push yields higher, negatively affecting stocks and supporting the dollar.

Bruno Schneller, of INVICO Asset Management, comments: “The recent decline in US yields has raised questions about the need for the Fed to continue raising rates, especially if they continue to adjust downwards.”

Major U.S. stock indexes close lower on Thursday, ending the Nasdaq and S&P 500’s longest rallying streaks in two years, as market optimism about looser monetary policy fades.

Asian markets

Chinese stocks also lost 0.5%, resurfacing concerns about the world’s second largest economy.

The 10-year Treasury yield is trading at 4.63%, after gaining 12 basis points on Thursday, marking its biggest daily advance in three weeks.

In the foreign exchange markets, the dollar index falls 0.07% after the overnight gains and operates at 105.84 units. The dollar is nearing one-year highs against its Japanese pair, reaching 151.40 yen, and hitting one-week highs against the Australian and New Zealand dollars.

In commodity markets, crude oil prices are advancing nearly 1%, while spot gold is down 0.2%, settling at $1,954.20 an ounce, on track to record its worst week in more than a year. month, with a decrease of 1.8%.

Source: Ambito

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