Global stocks recover some ground on Ukraine talks
Bond yields climb in anticipation of Fed raising interest rates by at least 25 basis points
16 March 2022 - 12:09
byCarolyn Cohn and Andrew Galbraith
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London/Shanghai — World stocks recovered ground on Wednesday as markets watched for signs of light in the Ukraine conflict, while Treasury yields reached their highest since mid-2019 in anticipation of the first US interest rate hike in three years.
Chinese stimulus hopes also boosted stocks.
Ukrainian President Volodymyr Zelensky said on Wednesday that peace talks between Russia and Ukraine were sounding more realistic but more time was needed, as Russian air strikes killed five people in the capital Kyiv and the refugee tally from Moscow’s invasion reached 3-million.
Russian foreign minister Sergei Lavrov also said some formulations of agreements with Ukraine were close to being agreed.
Western governments have imposed tough sanctions on Russia for the invasion, which Moscow calls a “special operation”.
“These sanctions probably are working, hopefully that will put some pressure on both sides to get around the table and negotiate,” Gregory Perdon, co-CIOat Arbuthnot Latham, said. The invasion could dampen the pace of Fed rate hikes he added.
“I don't see this as a flash-in-the-pan military conflict, it has resulted in a big shock to the oil market.”
Investors are expecting the US Federal Reserve to raise interest rates by at least 25 basis points amid surging prices later on Wednesday. Traders will also be closely watching the Fed for details on how it plans to end its bond-buying programme.
The MSCI world equity index rose 0.87%, moving away from one-year lows in the previous session. S&P futures gained 0.79% after US stocks enjoyed a relief rally overnight on Wall Street, driven by hopes of a resolution in Ukraine.
The S&P 500 gained 2.14%, the Nasdaq Composite jumped 2.92% and the Dow Jones industrial average rose 1.82%.
European stocks gained 2.2% and MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 4.2% after China’s vice-premier Liu He said Beijing will roll out more measures to boost the economy, as well as favourable policy steps for capital markets.
Chinese stocks were up 4.2%.
On Wednesday, Chinese health authorities reported a slight drop in new Covid-19 cases compared with a day earlier, though major cities continue to grapple with controlling the spread of the virus.
US 10-year Treasury yields rose to 2.204% on the Fed rate hike hopes, their highest since June 2019. The five-year yield rose to 2.149%, its highest since May 2019.
Germany’s 10-year government bond yield rose to its highest since November 2018 at 0.387%.
Russia has $117.2m in interest payments due on two dollar-denominated Eurobonds on Wednesday. Its finance ministry has said it will make the payments in roubles if sanctions prevent it from paying in dollars — a move markets would view as a default.
The dollar was down 0.2% against a basket of peers, trading at 98.708, and steady versus the yen at 118.30, albeit close to the previous session’s five-year high.
Japan reported a wider-than-expected trade deficit in February as an energy-driven surge in import costs caused by huge supply constraints added to vulnerabilities for the world’s third-largest economy.
The euro gained 0.33% to $1.0989.
Markets are juggling geopolitical risks, macro-economic risks, price risks and central bank reactions, Commerzbank analysts said. “If one of the balls is ignored it is possible that they all go everywhere, in the shape of prices going berserk.”
Oil prices have been volatile since the Ukraine invasion. Global benchmark Brent crude rose 2.38% to $102.22 a barrel, and West Texas Intermediate added 1.62% to $98.08.
Spot gold was little changed at $1,918.95 an ounce.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Global stocks recover some ground on Ukraine talks
Bond yields climb in anticipation of Fed raising interest rates by at least 25 basis points
London/Shanghai — World stocks recovered ground on Wednesday as markets watched for signs of light in the Ukraine conflict, while Treasury yields reached their highest since mid-2019 in anticipation of the first US interest rate hike in three years.
Chinese stimulus hopes also boosted stocks.
Ukrainian President Volodymyr Zelensky said on Wednesday that peace talks between Russia and Ukraine were sounding more realistic but more time was needed, as Russian air strikes killed five people in the capital Kyiv and the refugee tally from Moscow’s invasion reached 3-million.
Russian foreign minister Sergei Lavrov also said some formulations of agreements with Ukraine were close to being agreed.
Western governments have imposed tough sanctions on Russia for the invasion, which Moscow calls a “special operation”.
“These sanctions probably are working, hopefully that will put some pressure on both sides to get around the table and negotiate,” Gregory Perdon, co-CIOat Arbuthnot Latham, said. The invasion could dampen the pace of Fed rate hikes he added.
“I don't see this as a flash-in-the-pan military conflict, it has resulted in a big shock to the oil market.”
Investors are expecting the US Federal Reserve to raise interest rates by at least 25 basis points amid surging prices later on Wednesday. Traders will also be closely watching the Fed for details on how it plans to end its bond-buying programme.
The MSCI world equity index rose 0.87%, moving away from one-year lows in the previous session. S&P futures gained 0.79% after US stocks enjoyed a relief rally overnight on Wall Street, driven by hopes of a resolution in Ukraine.
The S&P 500 gained 2.14%, the Nasdaq Composite jumped 2.92% and the Dow Jones industrial average rose 1.82%.
European stocks gained 2.2% and MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 4.2% after China’s vice-premier Liu He said Beijing will roll out more measures to boost the economy, as well as favourable policy steps for capital markets.
Chinese stocks were up 4.2%.
On Wednesday, Chinese health authorities reported a slight drop in new Covid-19 cases compared with a day earlier, though major cities continue to grapple with controlling the spread of the virus.
US 10-year Treasury yields rose to 2.204% on the Fed rate hike hopes, their highest since June 2019. The five-year yield rose to 2.149%, its highest since May 2019.
Germany’s 10-year government bond yield rose to its highest since November 2018 at 0.387%.
Russia has $117.2m in interest payments due on two dollar-denominated Eurobonds on Wednesday. Its finance ministry has said it will make the payments in roubles if sanctions prevent it from paying in dollars — a move markets would view as a default.
The dollar was down 0.2% against a basket of peers, trading at 98.708, and steady versus the yen at 118.30, albeit close to the previous session’s five-year high.
Japan reported a wider-than-expected trade deficit in February as an energy-driven surge in import costs caused by huge supply constraints added to vulnerabilities for the world’s third-largest economy.
The euro gained 0.33% to $1.0989.
Markets are juggling geopolitical risks, macro-economic risks, price risks and central bank reactions, Commerzbank analysts said. “If one of the balls is ignored it is possible that they all go everywhere, in the shape of prices going berserk.”
Oil prices have been volatile since the Ukraine invasion. Global benchmark Brent crude rose 2.38% to $102.22 a barrel, and West Texas Intermediate added 1.62% to $98.08.
Spot gold was little changed at $1,918.95 an ounce.
Reuters
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European shares rise on hopes of progress in Russia-Ukraine peace talks
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