Shares climbed Monday while the euro advanced as investors weighed the prospect of Europe following the Federal Reserve with more outsized interest-rate hikes. Japanese and Australian equities rose, European futures advanced and US contracts were steady after the S&P 500 and Nasdaq 100 snapped three-week losing streaks on Friday. Markets in China, Hong Kong and South Korea are closed for holidays. The euro led gains versus the greenback after Bundesbank President Joachim Nagel signaled support for further interest-rate hikes in Europe. The yen pared Friday’s rebound, even after officials in Tokyo increased their jawboning of the currency over the weekend. Crude oil dropped almost 2%. Investor focus is on August US inflation data due Tuesday, with headline CPI expected to cool to an 8% a year pace while the core measure that excludes food and energy is seen accelerating. Traders almost fully expect another jumbo-sized Fed hike next week, following two 75-basis-point increases. Markets also have to digest the implications of Ukraine’s counter-offensive, after its forces continued their rapid advance in the Kharkiv region, exploiting a retreat of Russian defenses.
The rebound in risk assets and the retreat in the dollar at the end of last week contrast with the hawkish remarks from Fed officials. That stance, and recession worries, has driven equities down to nearly oversold levels. The Levkovich Index, a sentiment gauge, fell to -16 last week, a hair away from the -17 level that defines panic. Bank of America Corp.’s bull-and-bear indicator slid to the “maximum bearish” level -- often seen as a contrarian buy signal. Signs of weakening demand for oil may underscore the potential that policy makers will be willing to slow the pace of tightening going forward. West Texas Intermediate sank toward $85 a barrel amid concerns the outlook for consumption is worsening as global growth slows and China maintains its strategy of controlling Covid-19 by curbing activity.
Nikkei +1,01% Hang Seng +2,69% CSI +1,39% Shanghai +0,82% Shenzen +0,65%
Eur$ 1,0091 CNH 6,9421 CNY 6,9265 JPY 143,25 GBP 1,1627 CHF 0,9598 RUB 60,6335 TRY 18,2390 WTI$ 85,40 -2% Gold 1,714 -2% BTC 21,755 +0,5% ETH 1,726 -2%
S&P +0,04% Nasdaq +0,05% EuroStoxx +0,62% FTSE +0,20% Dax +0,73% SMI +0,47%
Macro :
- Bitcoin Rally Cools Ahead of CPI Data, Ethereum Network Upgrade
- JPMorgan Says Dollar Bulls Should Stay the Course Amid Retreat
- Light at End of the Inflation Tunnel
- Zelenskiy to Appeal on Wednesday for More US Weapons: Reuters
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