European stocks fall as yields rise; Yen Tumbles: Market Recap

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(Bloomberg) – Stocks in Europe fell and bond yields climbed as markets reopened after a holiday amid hawkish comments from Federal Reserve officials and Russia’s new campaign in eastern Europe. ‘Ukraine.

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Healthcare stocks led the Stoxx Europe 600 index lower. Dutch carmaker Stellantis NV slumped after halting production at a plant near Moscow that makes vans, following a long list of manufacturers who ceased production in factories in Russia due to the war in Ukraine.

Energy stocks were led higher by TotalEnergies SE on a positive first-quarter report, while the materials sector was in the green as gains in copper and other industrial metals pushed the spot index higher. Bloomberg Commodities to a record high.

U.S. futures rose after the end of little-changed stocks on Monday. Treasury yields rose after the long end fell on Monday. St. Louis Fed President James Bullard said rate hikes of 75 basis points – while not the base case – should not be ruled out as the central bank needs to act quickly to fight against inflation. European bonds fell, with German and UK 10-year yields at their highest since 2015.

Disruptions to supply chains from China’s shutdowns and wartime commodity flows are keeping pressure on central banks to rein in runaway prices at a time when global growth is expected to slow. The World Bank has cut its forecast for global economic expansion this year following the Russian invasion.

“Bullard’s comments really sum up the dilemma that many central banks around the world have found themselves in,” said Jeffrey Halley, senior market analyst at Oanda. “Fortunately, they have plenty of excuses in the form of the pandemic and the war in Ukraine. Central banks can now catch up, increase aggressively and run the risk of recessions. Getting over the pain and getting over it may be the least worst option.

Stocks rose in Japan as the yen extended its longest losing streak in at least half a century. Hong Kong tech names fell on ongoing regulatory concerns. China fell as investors weighed measures to combat economic headwinds from Covid-led lockdowns.

In China, markets are also awaiting the release of benchmark lending rates from banks on Wednesday after the People’s Bank of China cut the reserve requirement ratio for most banks on Friday but refrained from cutting interest rates. interest.

The latest policy measures “really highlighted that easing is needed,” Gareth Nicholson, Nomura’s chief investment officer and head of discretionary portfolio management, told Bloomberg Television. “The markets think we haven’t done enough and they’re going to have to step things up.”

Meanwhile, Ukrainian President Volodymyr Zelenskiy said on Monday that Russian forces have begun the campaign to conquer the Donbass region in eastern Ukraine as Moscow continues to move troops and equipment to that part of the country. .

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What to watch this week:

  • Revenues include American Express, China Telecom, IBM, Johnson & Johnson, Netflix, Tesla

  • Chicago Fed President Charles Evans will speak on Tuesday

  • EIA Crude Oil Inventory Report, Wednesday

  • China’s Prime Lending Rates, Wednesday

  • Federal Reserve Beige Book, Wednesday

  • Debate on the French presidential election, Wednesday

  • San Francisco Fed President Mary Daly and Chicago Fed President Charles Evans are due to speak on Wednesday

  • Eurozone CPI, US initial jobless claims, Thursday

  • Fed Chairman Jerome Powell and ECB President Christine Lagarde discuss the global economy at an IMF event on Thursday

  • Manufacturing PMIs: Eurozone, France, Germany, UK, Friday

  • The Bank of England’s Andrew Bailey will speak on Friday

Some of the major movements in the markets:

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  • The Stoxx Europe 600 fell 0.8% at 9:36 am London time

  • S&P 500 futures rose 0.3%

  • Nasdaq 100 futures rose 0.3%

  • Dow Jones Industrial Average futures rose 0.3%

  • The MSCI Asia-Pacific index fell 0.4%

  • The MSCI Emerging Markets Index fell 0.4%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro rose 0.2% to $1.0807

  • The Japanese yen fell 1.1% to 128.39 per dollar

  • The offshore yuan fell 0.2% to 6.3920 per dollar

  • The British pound rose 0.1% to $1.3033

Obligations

  • The yield on 10-year Treasury bills rose three basis points to 2.89%

  • Germany’s 10-year yield rose seven basis points to 0.91%

  • The UK 10-year yield rose nine basis points to 1.98%

Merchandise

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