European stocks decline and oil retreat due to inflation, China, Russia risks


Stocks in Europe fell and US futures wavered as Chinese stocks sold off relentlessly in global markets, adding to worries about the war in Ukraine and a tightening of the Federal Reserve. going to happen. Crude oil extends a retracement.

The Stoxx Europe 600 index fell more than 1 percentage point, and the futures contracts of the S&P 500 and Nasdaq 100 were volatile, signaling another volatile day could be on the horizon after the Nasdaq closes in a bear market. in Monday.

A gauge of Asian shares headed for a 19-month low. Strong Chinese economic data failed to assuage investor gloom, as the country faces the growth impact of shutdowns to combat the coronavirus outbreak.

Treasuries fell slightly but 10-year yields remained near their highest levels since 2019. The dollar slipped, while the euro edged higher.

Some commodity rallies are waning. Brent fell to $100 a barrel as traders reassessed the potential impact of Russian oil supply disruptions. Meanwhile, China’s Covid shutdown poses risks to energy demand.

Traders now expect a more aggressive path for Fed rate hikes, predicting around seven quarter-point moves by 2022. Inflation was already a challenge before the war and sanctions against Russia trigger a commodity shock, adding to the case for tighter policy even as economic growth cools. .

“A bad equity market doesn’t break out,” said Chris Murphy, a derivatives strategist at Susquehanna International Group. “Crude oil prices could be lower but” everyone is worried about US Treasury yields, he said. There are many problems that need to be solved.

Meanwhile, Russia has begun the process of paying off two bond notes that are due this week. Investors are waiting to see if the country will default on its debt after the US and its allies froze Russia’s foreign currency reserves. The ruble appreciates in trading in Moscow.

Elsewhere, nickel trading will resume on the London Metal Exchange on Wednesday, more than a week after it was suspended amid a historic squeeze.

The panorama of risks, from geopolitics to the threat of policy error as central banks grapple with high inflation, suggests that there is plenty of volatility ahead.

“It will take some time to tame inflation,” Kathy Entwistle, managing director at Morgan Stanley Private Wealth Management, said on Bloomberg Television. “The average consumer is the one that’s going to feel it the most this year. And they’re the ones that held the market last year.” European stocks decline and oil retreat due to inflation, China, Russia risks

Fry Electronics Team

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