When the fear of growth returns the stock bounce fades and the dollar gains

LONDON, May 18 (Reuters) – A rebound in equities on Wednesday eased sentiment as economic growth outlook and concerns over rising inflation eased sentiment, underscoring how high the UK inflation rate is at 9%.

European stocks were mostly low and the future of Wall Street indicated weak openness.

Many analysts have classified this week’s sharp rally as the short-term hopping of the common type during the long downward trend for stocks. Some are willing to predict the end of sales after the first five months of the year for risky assets that are highly macroeconomic.

Sign up now for unlimited free access to Reuters.com

“Investors’ sentiment and confidence are trembling and as a result, 3Rs – rates, recession and risk are likely to see volatile and volatile markets until further clarity,” said Mark Heffel, Chief Investment Officer, UBS Global. Wealth management.

At 1115 GMT, the wider Euro STOXX 600 (.STOXX) The UK FTSE 100 is down 0.35% (.FTSE) Was 0.23% lower.

Wide index of MSCI of Asia-Pacific equities outside Japan (.MIAPJ0000PUS) 0.68%, up from its longest success trajectory since February. Nikkei of Japan (.N225) 0.94% and miners led the Australian stock (.AXJO) About 1% more.

MSCI Global Equity Index (.MIWD00000PUS) 0.1%, up 2% so far this week, but down 16% from its peak in January.

MSCI Global Equity Index

In the currency markets, sterling suffered heavy losses, falling 1% to $ 1.2373 after the UK consumer price inflation touched 9% in April, a 40-year high and roughly in line with analysts’ expectations. The pound has risen sharply this week and is down on some gains on Wednesday.

See also  Kevin McCarthy outlines the Republican agenda just days before the midterms

British inflation is now very high in the major economies, but prices around the world are rising rapidly, forcing central banks to raise rates even as economic growth slows.

Canada’s April inflation measurement will also come after Wednesday.

The US dollar rose 0.3% to 103.62 after a sharp fall on Thursday and returned to its two-decade high of last week, while the euro fell the same amount to $ 1.0513.

Negative shocks

Positive data helped the mood this week, with forecasts of a steady increase in April and a US retail meeting forecast to beat industrial production expectations. read more

Wednesday’s data showed Japan’s economy contracted less than expected in the first quarter. read more

Shanghai is putting an end to its protracted lockout and China’s deputy prime minister has given pleasant comments to technology executives as a recent sign of easing pressure. read more

However, the good news was offset by a reminder by Federal Reserve Chairman Jerome Powell that controlling inflation would cause a rate hike and some pain. read more

Investors have set 50 basis points for US rate hikes in June and July and see the benchmark Fed Fund rate rise to 3% early next year.

U.S. Treasury revenues were more stable on Wednesday than most recent multi-year hikes, but Germany’s 2-year government bond yields reached its highest level since December 2011 after the worst central banker comments. The European Central Bank’s Glass Knot said on Tuesday that a 50 basis point increase in July is possible if inflation rises.

Although most prices were below recent highs, commodities rallied this week.

See also  The Dow shed 400 points to start the week as the Wall Street rally waned

Brent crude was up 0.85% at $ 112.88 a barrel on Wednesday, while US crude was up 1.19% at $ 113.74 a barrel.

The S&P Global Ratings downgraded growth forecasts for China, the United States and the Eurozone, underscoring the weak outlook for the world’s major economies.

“Two developments have changed the macro picture,” said chief economist Paul F. Grunwald pointed to Russia’s invasion and inflation in Ukraine, which has become larger, broader and more stable than previously thought.

Sign up now for unlimited free access to Reuters.com

Additional Report by Tom Westbrook in Singapore; Editing by Kim Gokil, William McLean

Our standards: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published.