Global stock indices stagnated near all-time highs on Tuesday, and dollar and government bond yields soared as some of the world’s largest economies continued to ease restrictions on COVID-19.
A surge in the price of almost everything from wood and wheat to metals and microchips has fueled discussions of a spike in inflation.
Sensitive cyclical sectors including energy, mining, travel and leisure helped push Europe up slightly, while tech giants on Wall Street, which surged during the pandemic, were pointing again down.
On Monday, New York Fed chief John Williams said U.S. economic momentum was not yet enough to change anything.
Borrowing costs in the bond market edged up on Tuesday, although signs that the world’s major central banks are in no rush to crack down on their massive stimulus packages kept yields on 10-year U.S. Treasuries below. 1.65% and German Bund yields below 13-month highs.
Australia’s central bank also left its key interest rates near zero overnight for a fifth meeting in a row and pledged to keep its policies very supportive for an extended period. Read more
MSCI’s largest global index (.MIWD00000PUS), which tracks 50 countries, barely budged just 1% from its record high.
Australia’s S & P / ASX200 (.AXJO) was up 0.6% and Hong Kong (.HSI) was up 0.7% in Asian thin trading due to the holidays in China and Japan.
The Taiwan tech stock exchange was the region’s main exception, with stocks (.TWII) closing 1.7% amid a rare spike in domestic COVID-19 infections and after Wall Street tech indices hit. difficulties Monday.
“We are seeing short-term volatility in inflation as the economic recovery progresses, and we believe markets are underappreciating the potential for price pressures over the medium term,” BlackRock analysts said in their note. weekly.
In the currency market, the dollar recovered some ground to partially offset last month’s long decline as investors rallied positions ahead of monthly payroll data expected at the end of the week.
The dollar index, which measures its value against a basket of six other major currencies, climbed 0.4% to 91.34, just short of a nearly two-week high. It fell more than 2% in April.
The pound fell slightly to $ 1.3865 ahead of a Bank of England meeting on Thursday where analysts believe the bank could announce a slowdown in its bond buying program.
There are also important UK regional elections on Thursday. The main focus will be on Scotland, where a big victory for the SNP party in the country’s decentralized parliamentary elections would put the issue of UK independence firmly on the radar. Read more
Cryptocurrency ether hit another all-time high, near $ 3,500.
The oil markets did an about-face, initially pushing Brent down 0.2% to $ 67.38 before pulling it back to close to $ 68.50. Wheat took a break after rising nearly 20% in April, while gold rose from a more than two-month high to $ 1,785 an ounce.
Emerging market investors also had a lot to juggle. Indian stock markets fell as COVID-19 infections surpassed 20 million more pounds and traders braced for another busy day in Latin America. The Colombian peso fell on Monday after its president withdrew a tax reform plan, sparking fears about its investment grade credit rating.
Peruvian markets have been shaken by the election, El Salvador bonds have been hit by the country’s president ousting key judges while Brazil’s central bank is expected to raise interest rates again this week.
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