NEW YORK / MILAN, May 3 (Reuters) – Global stock markets rose on Tuesday as 10-year US government bond yields fell from 3% as investors remained cautious, expecting the Federal Reserve to raise interest rates with a maximum of one day since 2000 to curb inflation.
Feeding on concerns about inflation, the data shows that job vacancies in the United States reached a record high in March as labor shortages continued. This suggests that employers may need to raise wages, which is likely to increase consumer prices. Read more
Investors expect the Fed to raise interest rates by half a percentage point on Wednesday and detail its plans to reduce its balance of $ 8.9 trillion. The US Federal Reserve raised its interest rate by 25 basis points in March.
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Major stock indexes in Europe rose, but Wall Street made smaller gains as traders prepared for a potentially more aggressive decision by politicians on Wednesday.
“The Fed won’t worry if these next few interest rate hikes end up hurting growth and leading to some job losses because the economy is on a solid footing right now,” said Ed Moya, a senior market analyst. in OANDA.
The World Index of MSCI (.MIWD00000PUS) rose 0.39% and the pan-European index STOXX 600 (.STOXX) rose 0.53% the day after a “flash crash” in the Nordic markets caused by trading involving one sales order. Citigroup.
The Dow Jones Industrial Average (.DJI) closed 0.2%, the S&P 500 (.SPX) rose 0.48% and the Nasdaq Composite (.IXIC) added 0.22%.
“We could get a rebound after the Fed meeting if it’s not smarter than what the market fears,” said Jimmy Chang, chief investment officer at Rockefeller’s Global Family Office, “but I think the broader trend is still very cautious about equity. “
Nine of the S&P 500 sectors rose, driven by 2.87% in energy gains (.SPNY), while oil and gas (.SXEP) jumped 4.1% in Europe to top the markets there.
Overnight in Asia, the Central Bank of Australia raised its key interest rate by higher than expected 25 basis points, raising the Australian dollar by as much as 1.3% and hit local stocks.
The Bank of England is expected to raise interest rates on Thursday for the fourth time in a row.
Asian stocks on Tuesday were mostly stable in trading, which thinned over the holidays, with Chinese and Japanese markets closing. But in Hong Kong, shares of Alibaba (9988.HK) fell as much as 9% due to concerns about the status of its billionaire, founder Jack Ma.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, USA, May 3, 2022. REUTERS / Brendan McDermid
State media reported that the Chinese authorities had taken action against a person named Ma who hit the shares hard, but she was recovering the losses after the report was revised to make it clear that he was not the founder of the company. Read more
The 10-year reference yield on German bonds rose to 1% for the first time since 2015 before withdrawing, as a precaution was introduced ahead of expected interest rate hikes in the United States and the United Kingdom this week.
Yields on 10-year treasury bonds fell 1.5 basis points to 2.981% after surpassing the key 3% stage on Monday for the first time since December 2018.
The dollar fell against a basket of major currencies as investors weighed in on what part of the Fed’s expected move to raise interest rates this week and has since been made.
The dollar, backed by the purchase of safe havens due to concerns about the economic outlook, has remained just below the highest level in almost two decades in April, with the euro remaining above its five-year low from last month. .
The dollar index fell 0.106%, while the euro rose 0.17% to $ 1.0522. The Japanese yen was slightly changed at 130.16 per dollar.
Oil fell as fears over demand over COVID’s prolonged blockades in China outweighed support for a possible European oil embargo on Russia over the war in Ukraine.
US crude futures fell $ 2.76 to $ 102.41 a barrel, while Brent fell $ 2.61 to $ 104.97 a barrel.
Copper and aluminum prices have fallen sharply as weak manufacturing data on Monday, COVID-19 outbreaks in China and rising levels have fueled fears that demand for metals will ease.
Gold strengthened, following a slight retreat in the yield on government bonds and the dollar, while investors expected an aggressive rise in interest rates from the Fed on Wednesday.
US gold futures rose 0.4% to $ 1,870.60 an ounce.
Bitcoin fell 2.56% to $ 37,535.85.
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Reporting by Herbert Lash, additional reporting by Danilo Masoni in Milan; Edited by Alexander Smith, Bernadette Baum and David Gregorio
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