Broker reacts while trading at its computer terminal at a brokerage firm in Mumbai, India, February 1, 2020. REUTERS / Francis Mascarenhas
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- Global stocks fell to a 1-1 / 2 year low, down nearly 20% since the beginning of the year
- Europe starts the fight for futures on US stocks down 2%.
- The dollar reaches 2-year highs in AUD, NZD
- The fall of bitcoin reaches a new 16-month low
- Copper buckles to the lowest since October
LONDON, May 12 (Reuters). leading to the global economy is stagnant.
These nerves and the still escalating war in Ukraine reduced major European markets by more than 2% at the start of trading and left MSCI’s lowest global stock index (.MIWD00000PUS) at its lowest level since late 2020 and declining by nearly 20% for the year.
Growth-sensitive Australian and New Zealand dollars fell about 0.8% to near two-year lows. The Chinese yuan fell to a 19-month low as the dollar reached its highest level since late 2002.
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Almost all major volatility indicators signaled danger. Bitcoin was caught in the fiery sale of risky crypto assets as it fell another 8% to $ 26,570, close to $ 40,000 just a week ago and nearly $ 70,000 last November.
“We have made great moves,” said Caroline Simmons, UBS’s chief investment officer in the United Kingdom, referring to bond markets and economic expectations. “And when the market falls, it tends to fall pretty fast.”
Wednesday’s data showed that inflation in the United States continues to rise. Basic consumer prices rose 8.3% year-on-year in April, slightly slower than the 8.5% pace in March, but still above economists’ forecasts of 8.1%. Read more
US markets shook after the news, closing sharply lower, and futures prices pointed to a new round of 0.2% -0.7% decline for the S&P 500, Nasdaq and Dow Jones Industrial later.
“We are now very much on the agenda with at least two additional (US) increases of 50 basis points,” said Damien Rooney, director of institutional sales at Argonaut in Perth.
“I think we were probably misled six months ago with the rise of American actions of hope and prayer and the madness of meme actions,” he added.
MSCI’s broadest index for Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) fell 2.3% to a 22-month low overnight. Japan’s Nikkei (.N225) fell 1.8%.
Bonds were traded in both Europe and Asia, especially in the long run, leveling the yield curve as investors prepared for short-term increases to hurt long-term growth, a result likely to slow or even reverse the rise. of interest.
The 10-year reference yield on government bonds fell in the United States and fell another 7 basis points to 2.8569% on Thursday. The difference between interest rate-sensitive two-year yields and 10-year yields narrowed by 4.2 bps.
In Europe, Germany’s 10-year yield, the benchmark for the bloc, fell 12 basis points to 0.875%, its lowest level in nearly two weeks.
“I think a lot of that is catching up yesterday, and there’s still a lot of negative sentiment in the US Treasury curve,” said Lynn Graham-Taylor, a senior interest strategist at Rabobank.
World stocks are experiencing the worst start to the year
I AM SELLING IN MAY
Interest rate outlook raises the US dollar and has the biggest impact on riskier assets, which rose after two years of stimulus and low interest rates.
The Nasdaq (.IXIC) is down nearly 8% in May so far and more than 25% this year. The Hong Kong Hang Seng Tech Index (.HSTECH) fell 1.5% on Thursday and fell more than 30% this year.
Cryptocurrency markets are also melting, with the collapse of the so-called TerraUSD stablecoin highlighting the turmoil, as well as the sale of bitcoin and the next largest cryptocurrency, ether. Read more
The weakening picture of growth outside the United States is also shattering investor confidence as the war in Ukraine threatens an energy crisis in Europe and the prolongation of the blockade of COVID-19 in China throws another key into the supply chain.
Nomura estimated this week that 41 Chinese cities are in full or partial blockade, representing 30% of the country’s GDP.
Heavy real estate developer Sunac (1918.HK) has said it has missed interest payments on bonds and will miss more as China’s real estate sector remains in the grip of a credit crunch. Read more
The yuan fell to a 19-month low of 6.7631 and fell almost 6% in less than a month.
The Australian dollar fell 0.8% to a nearly two-year low of $ 0.6879. The kiwi fell by a similar margin to $ 0.6240, although the euro and yen remained stable to keep the dollar index slightly below the peak of two decades.
Sterling was at a two-year low of just under $ 1.22, and economic data there has raised concerns and fears that Britain’s Brexit agreement with the EU is in danger of falling apart again due to the same old problem on the Northern Ireland border. Read more
In the commodities trade, oil regained some of Wednesday’s jump on fears of growth.
Brent crude futures fell 2.3 percent to $ 104.93 a barrel, while highly sensitive metals copper and tin fell 3.5 percent and 9 percent, respectively. This is the lowest level of copper since October.
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Additional reports from Tom Westbrook in Singapore; Edited by Kim Coghill
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