Stocks pared losses and U.S. equity futures climbed, providing a little respite for global markets from concerns about an economic downturn.
An Asia-Pacific equity gauge Tuesday trimmed a drop of about 2% in half, aided by a turnaround in China. S&P 500, Nasdaq 100 and European contracts rose, pointing to steadier sentiment following a Monday rout in U.S. shares.
A haven bid for Treasuries eased. Uncertainty over how far the Federal Reserve will hike interest rates to stem high inflation continues to shadow bonds.
Oil fell below $102 a barrel on the economic worries and the European Union’s move to soften some proposed sanctions on Russian oil over the Ukraine war.
A dollar gauge dipped but remained in sight of the highest level since 2020. In cryptocurrencies, Bitcoin added over $1,000 after sliding below $30,000.
Bouts of relative cross-asset calm have tended to be short-lived in 2022. China’s growth-sapping Covid lockdowns, a global wave of monetary tightening and the Ukraine war continue to cast a pall over the world economy. The Fed in a report warned of deteriorating liquidity conditions in key financial markets.
“For now investors need to be prepared for continued volatility,” Solita Marcelli, Americas chief investment officer at UBS Global Wealth Management, wrote in a note. She added “sentiment is bearish” but not capitulating.
In the latest policy comments, Fed Bank of Atlanta President Raphael Bostic said he favors continuing to raise rates by half-point moves rather than anything larger. He said the odds for a 75-basis-point hike are low but added he’s taking nothing off the table.
Investors are awaiting the April U.S. consumer-price index print on Wednesday to gauge whether inflation is peaking.
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Source By: Bloomberg