Geopolitical Tensions Impact Global Markets
The Euro zone bond yields oscillated but ended lower at the end with fears of a Russian invasion of Ukraine building up
The US Labour Department said that consumer prices jumped 7.5 per cent compared to 12 months earlier, the steepest year-over-year increase since February 1982. Shortage of labour and very low interest rate coupled with robust consumer spending has made inflation skyrocket in the past year. The US benchmark indices Dow Jones, S & P 500 and NASDAQ have fallen by almost 3 per cent in the last fortnight. A steep decline in Meta Platforms (Facebook) due to federal law suits weighed heavily on the technology sector. The consumer staples sector outperformed within the S & P 500 index, aided by quarterly results’ gain of Walmart and Procter and Gamble.
The yield on the benchmark 10-year US Treasury note was down 5.6 basis points at 1.918 per cent. The US index was lower, largely improving from a sharp sell-off as the country’s plans to close its Kyiv embassy in Ukraine sent geopolitical tensions to increase. The Federal Reserve released the minutes from the FOMC meeting, which provided some relief to the markets as they contained no immediate rate hike and an overly hawkish commentary. The Singapore Exchange traded 62 points lower or 1.82 per cent at 3,428 levels. Singapore finance minister announced a $ 500 million package to support jobs and business as a part of its budget proposal.
The Nikkei index fell 0.47 per cent to 27,122.07. Japan’s stock markets generated a negative return for the fortnight, with sentiment weighed down by geopolitical tensions in Ukraine and concerns about a more aggressive monetary policy tightening by the US Federal Reserve. The Bank of Japan’s fixed rate Japanese government bond (JGB) purchase operation, which saw no offers with market yields remaining lower, was successful in capping long-term interest rates, with the yield on the 10-year JGB unchanged at 0.22 per cent.
The yen strengthened to around JPY 115.18 against the US dollar from previous week’s JPY 115.45. The Chinese markets grew as constructive comments from government officials and lower-than-expected inflation data improved investors’ risk appetite. From the week, the Shanghai Composite index added Geopolitical Tensions Impact Global Markets The Euro zone bond yields oscillated but ended lower at the end with fears of a Russian invasion of Ukraine building up Global Market Watch 0.8 per cent and the CSI 300 index gained 1.1 per cent.
The yield on the 10-year sovereign bond ended flat at 2.814 per cent and the yuan strengthened slightly against the US dollar to 6.33 per dollar from 6.36 the prior week. The shares in Europe dropped amid ongoing geopolitical tensions over Ukraine and doubts about the monetary policy.
Germany’s DAX index tumbled 1.08 per cent to 15,042.51. France’s CAC 40 index also slipped 1.14 per cent. The UK’s FTSE 100 index slipped 0.79 per cent and stands at 7,513.62. The Euro zone bond yields oscillated but ended lower at the end with fears of a Russian invasion of Ukraine building up. The Euro zone and UK government bond yields broadly traded in lower core markets. The Bank of England recognised that monetary policy could not help more about the causes but then said it was essential to raise rates now to curb inflation. The European Central Bank (ECB) also displayed a hawkish turn by termination asset purchases earlier than expected and not ruling out a rate hike this year.