© Reuters.A man wearing an umbrella walks on the electric board, showing the Nikkei index of a Tokyo brokerage
Danilo Masoni and Anshuman Daga
Reuters Milan/Singapore-Reuters Milan/Singapore-Optimism about the economic outlook pushed commodity prices to new highs on Tuesday, helping US stocks remain stable as Fed Chairman Jerome Powell̵
Before 0919 GMT, the MSCI World Stock Benchmark Index was close to a two-week low, thanks to the rise of Asian commodity stock indexes and the rise of European travel stocks due to the prospect of relaxation of social restrictions.
British Prime Minister Boris Johnson formulated a phased plan on Monday to end the COVID-19 lockdown in the world’s sixth largest economy.
In recent days, the rapid rise in global bond yields has put pressure on world stock markets, which has stirred up market expectations that central banks may eventually relax their easing to ease inflation. Technology stocks are one of the hardest hit areas.
However, the sell-off in the bond market has eased after European Central Bank President Christine Lagarde said on Monday that the central bank is “closely monitoring” rising borrowing costs.
Investors now expect Fed Powell to be equally at ease when they testify before Congress in 1500 GMT.
Giuseppe Sersale, a strategist and fund manager at Milan Antilia, said: “If there is already an expectation that Powell can try to lower interest rates, then (Lagarde’s remarks) will further consolidate interest rates. “
However, technology stocks and interest-rate-sensitive industries, such as the decline in European utilities, offset strong travel and commodity stocks, and depressed
In Asia, the rise in commodities drove 0.9% in Australia, while Kospi in high-tech South Korea fell 0.3%. The Japanese market is closed for public holidays.
After high-growth stocks such as Apple (NASDAQ:), Microsoft (NASDAQ:) and Tesla (NASDAQ:) dragged the stock down 2.5% on Monday, Nasdaq futures fell 0.6% to a three-week low. The stock fell slightly by 0.1%.
Bond yields rose sharply this month because the United States will introduce more fiscal stimulus measures, thereby boosting hopes for global economic recovery. However, this has also exacerbated inflation concerns, prompting investors to sell growth stocks that have risen in recent months.
Pictet Wealth Management Chief Investment Officer Cesar Perez Ruiz (Cesar Perez Ruiz) said in the report: “Real U.S. interest rates are now in the positive region, which has raised concerns about the consequences of the stock market.”
It rose slightly to 1.374%, but still below the one-year high of 1.394% hit on Monday.
The yield on German 10-year foreign debt also rose to -0.309%, but it was lower than the 8-month high of -0.278% hit on the previous trading day.
Commodity prices have strengthened again.
Oil prices have risen by more than $1, mainly due to optimism about the launch of the COVID-19 vaccine and the decline in production, because last week Texas shut down deep-frozen crude oil production, and the US supply slowly recovered.
Crude oil futures prices rose by 0.9% to $66.18 per barrel. Prior to this, oil prices had hit a 13-month high of US$66.79/barrel, up 1.2% to US$62.45/barrel.
A strategist at ING, led by Warren Patterson, said: “Oil has been dragged down by rising commodities, and a weaker U.S. dollar proves to be beneficial to the market.”
“At the same time, more and more people believe that the oil market will become more and more tense in the rest of this year.”
At the same time, due to tight supply and strong demand from China, a major consumer, boosting market sentiment, gold prices hit a 9-1/2-year high.
In the currency market, before Powell’s testimony, the U.S. dollar briefly fell to its lowest point since January 13, while commodity-related currencies hovered near multi-year highs.
The euro rose 0.1% to 90.143 against the dollar, and the euro was flat at $1.2151.