Global stocks eased; Europe stock markets were lower
Global stocks retreated as the dollar fell further from last week’s one-year low as investors focused on what the Federal Reserve should do to curb inflation.
Thanks to a broad global stock retreat, the MSCI All-World index retreated 0.22%.
S&P 500 and Nasdaq 100 futures retreated between 0.3-0.5%.
Tesla will report earnings later, as will Morgan Stanley, amid solid earnings from rivals, allaying some fears about the sector’s stability.
The Fed’s “cream book” of economic conditions will be released on Wednesday.
The inversion between the three-month Treasury yield and the 10-year yield, at more than 160 bps, is the deepest since 1981 when the Fed funds rate was declining from a peak of 19% — suggesting markets are expecting rates to fall.
European markets lower on mixed fed signals and inflation statistics
European markets were lower as investors digested inflation statistics and mixed signals from the US Federal Reserve on the direction of interest rate hikes.
The pan-European Stoxx 600 index retreated 0.34%, tech shares fell 1.42%, and mining 1.3%, despite the latest Chinese economic reports.
UK consumer price inflation was 10.12% in March, down from 10.43% in February. Economists expected a drop to 9.8%.
Statistics from Tuesday indicated that UK salary increase had grown more slowly than expected in the period leading up to March; economists commented that this could complicate the Bank of England’s determination as to whether or not to postpone any rate upturns at its policy conference in May.
The president of the Atlanta Federal Reserve said he sees another rate hike of 25 basis points before suspending its role in the economy. This would take the US federal funds rate from 5% to 5.26%.
Bostic’s words came after St. Louis Federal Reserve President James Bullard told Reuters he supported a higher terminal rate of 5.50% to 5.75%.
The Stoxx 600 hit a 14-month high in Tuesday’s session. Investors have maintained risk-off levels despite continued inflationary volatility and central banks being forced to continue considering rate hikes.
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