European and US equity futures rose on Monday, but the dollar fell as market risk avoidance, driven by high inflation and concerns about a global recession, eased.
The Stoxx Europe 600 stock index rose 0.6% and the London FTSE 100 rose 1%.
In the futures market, contracts to track the S & P 500 increased by 0.8% and contracts for the technology-focused Nasdaq 100 increased by 0.6%.This followed a late turnaround on Wall Street on Friday, when the S & P Equity Benchmark was temporarily held. Entered The bear market area (defined as a 20% drop from the recent peak) rose 0.01% before rebounding.
Meanwhile, the dollar index, which measures greenbacks against the six major currencies, fell 1%.
The euro rose 1.1% to buy at just under $ 1.07, repelling both the weak dollar and European Central Bank governor Christine Lagarde. End signal Negative interest rates in the euro area within a few months. Sterling was up 0.7% to just under $ 1.26.
“The market has accumulated huge dollars in recent months,” said Deutsche Bank strategist George Saraberos. “It has led to a very large overvaluation of the dollar.”
Global stocks fell this year as inflation arose as the economy resumed after the coronavirus shut down and Russia invaded Ukraine and collapsed fuel and food prices. Hit the highs of decades Many countries and central banks have moved to raise interest rates accordingly.
James Ashley, Head of International Market Strategy at Goldman Sachs Asset Management, said:
“In our view, a slowdown is unavoidable globally, but a recession is unavoidable.”
Expectations of long-term rate hikes by investors who sell out stocks and the US Federal Reserve have set the dollar index in the last few weeks. High price for the first time in 20 years.. However, analysts are currently asking if the rise in reserve currencies is overkill.
Deutsche Bank’s Saravelos said dollar buying over the past six months was “equivalent” to the level of inflows seen during the 2008 Lehman shock and the March 2020 market riots caused by the coronavirus. ..
“The deterioration of global growth is [to the dollar] Not only is it bigger, but it’s bigger than what is priced by other asset classes, “he said.
As risk aversion was eased, government debt prices also softened on Monday. Yields on 10-year Treasuries, which are inversely proportional to the price of benchmark debt securities, increased 0.03 percentage points to 2.82 percent. Germany’s equivalent Bund yield rose by the same amount to 0.98 percent.
In Asia on Monday, Hong Kong’s Hang Seng Index fell 1.2%, with losses of about 10% since early March amid a severe anti-coronavirus blockade in China. Tokyo’s Nikkei 225 rose 1%, while mainland China’s CSI 300 fell 0.6%.
Brent crude, the oil benchmark, rose 1.1% to $ 113.8 a barrel.
European stocks rise and the dollar weakens as traders assess their economic outlook
Source link European stocks rise and the dollar weakens as traders assess their economic outlook