Hello. A sale of technology, a plan to revive tourism and soaring commodity prices. Here’s what moves the markets.
Tech stocks led a massive selloff on Tuesday, with mega-caps tumbling down and dragging the broader market down as cyclical sectors like industrials and financials moved in the other direction. US Treasury Secretary Janet Yellenrocked the market with comments that most economists take as obvious: that interest rates will likely have to rise as government spending rises and economic growth accelerates. She later clarified that she was not planning any rate hikes. Still, his comments seemed to crystallizeexisting fears about rising prices in a market already showing some nervousness about costly stock valuations.
G-20 tourism ministers put their weight behindvaccine passports as a way to jumpstart the travel industry, with documents showing when a person has been fully vaccinated, has immunity, or recently tested negative for Covid-19. The European Union is also looking to tackle the longer fight against the virus by proposing thethe joint purchase of treatments, a means of securing supplies once the acute phase of the pandemic has passed. UK,new laboratories will be built to accelerate the development of vaccines to fight against new variants of the coronavirus.
The European Union is ready toannounce new rules on Wednesday that would prevent foreign state-funded companies from undermining their rivals in the EU. Competition Commissioner Margrethe Vestager has backed the plans, which make no mention of China but follow complaints from European companies that companies in the country are getting support they cannot match. Separately on tensions with China, G-7 countries are considering US proposal for countriesto coordinate to counter what the White House sees as China’s economic coercion.
Boom in commodities
The emerging battle for supremacyin cryptocurrencies between the leader Bitcoin and the challenger Ether is not the only area where the markets are testing highs. Commodity pricesare booming. Oil prices have beenboosted as global reopening efforts support hopes of a return in demand to normal levels and by declining crude inventories in the United States. Copper also rose above $ 10,000 a tonne. Elsewhere, corn futures topped $ 7 a bushel for the first timesince 2013 in a context of supply problems due to the lack of rainfall in Brazil. And the prices of cheeseare also booming with the opening of restaurants across the United States and customers indulge in cheese burgers, mozzarella sticks and queso dips.
To come up…
Equity futures for Europe and US both show an uptrendWednesday, as the markets recover. European profits are busier again, with figures coming from automaker Stellantis, insulin maker Novo Nordisk and shipping giant AP Moller-Maersk. On the economic data front, we will get statements of service activity for the euro zone. In Spain, watch the fallout fromA resounding victory for Prime Minister Pedro Sanchez’s biggest critic in the Madrid regional elections.
What we read
This is what caught our attention over the past 24 hours.
And finally, here is what interests Emily Barrett this morning
The shocking comments by Treasury Secretary Janet Yellen that interest rates could rise in the future have caused some confusion, but so far, at least, it seems to be playing out mostly in the countries of the experts rather than the markets. While stock indices are down, futures have spent much of the Asian session in the green. And Treasury yields still managed to end the US session slightly lower that day.
If the bond markets are unfazed, this is hardly surprising. Yellen’s statement is miles away from the hawkish scenarios traders have been pricing in tariffs for some time. This time last month, Eurodollar futures reflected expectations of at least one Fed hike by the end of next year, and possibly four by the end of 2023. C t is relative to the central bank’s own projections that borrowing costs are expected to stay close to zero. entire period. Traders have downgraded their implausibly hawkish stance over the past month, although it is still well ahead of the Fed’s forecast.
With so many markets closed in Asia, including spot Treasuries, European trade may be a better indicator of how the markets are looking through the hype. But it really should end.
Of course, investors should pay close attention when Yellen talks about interest rates – after all, she is the only Treasury Secretary to have headed both the Federal Reserve and the White House Council of Economic Advisers. the central bank and the Treasury in this era of massive fiscal and monetary expansion. But no one has really strayed from the scenario: The US economy is still in the process of repairing itself, and the global context is fragile with many places still engulfed by the pandemic – so the recovery is incomplete.
Emily Barrett is a reporter and editor for Bloomberg News in Melbourne.
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– With the help of Emily Barrett