© Reuters. FILE PHOTO: Men wearing protective masks in the midst of the outbreak of coronavirus (COVID-19) use mobile phones in front of an electronic whiteboard showing Japan’s Nikkei index outside a brokerage house in Tokyo, Japan June 16, 2022. REUTERS / Kim Kyung-Hoon
By Tom Westbrook and Sam Byford
SINGAPORE / TOKYO (Reuters) – Global equities and bonds are heading for their first weekly rise in a month on Friday, with growth concerns dampened by hopes that falling commodity prices could help curb inflation.
MSCI̵[ads1]7;s broadest index of Asia-Pacific stocks outside Japan rose 1.4% on Friday, helped by short-selling shorts sellers Ali Baba (NYSE 🙂 – which rose almost 7% – amid hints that China’s technology decline is about to subside.
rose 1.2% for a weekly increase of 2%, while the increase overnight increased by 0.76%. EuroSTOXX 50 futures rose 1% and futures rose 0.6%.
The week has been marked by sharp declines in commodities due to concerns that the world economy is looking shaky and that interest rate increases will hurt growth – which in turn causes traders to reduce some bets on the size of interest rate increases.
a watch for economic production with its wide range of industrial and construction uses, is heading for its steepest weekly fall since March 2020. It fell in Shanghai on Friday and is down around 8% a week.
Oil is also heading for a weekly loss. Futures are down 2.5% on the week to $ 110.35 per barrel, while reference prices for grain fell with Chicago wheat by more than 8% for the week. [O/R][GRA/]
The falls have provided some relief in equities since energy and food have been the drivers of inflation. Following heavy losses recently, MSCI’s world stock index is up 2.3% this week, giving the first weekly rise since May.
“While market concerns about a sharp decline are the reason behind the recent moves to lower commodity prices, lower commodity prices feel as if they may be exactly what the doctor ordered for the global economy,” said NatWest marketing strategist Brian Daingerfield.
“So much of our fear of hard landing is related to concerns linking commodity prices.”
Soft data through this week has been blamed.
Meters for factory activity in Japan, the UK, the eurozone and the US all softened in June, with US manufacturers reporting the first direct fall in new orders in two years in the face of falling confidence.
Bonds rose sharply in the hope that investments in aggressive interest rate hikes would have to be reduced, with German two-year yields down 26 basis points on Thursday, with the biggest fall since 2008. [GVD/EUR]
The benchmark index fell 7 bps on Thursday and was stable at 3.0908%. [US/]
The US dollar has fallen from recent highs, but not too far as investors remain cautious. It was last quite stable at $ 1.05395 per euro and bought 134.73 yen. [FRX/]
The beaten yen has stabilized this week and received some support on Friday from Japanese inflation, which tops the Bank of Japan’s target of 2% for the second month in a row, which puts more pressure on its ultra-simple political stance.
The speakers of the European Central Bank and the Central Bank will be closely monitored later in the day, as will British retail sales data and German business confidence. Beyond that, the biggest concern is what it means for the company’s performance.
“Second-quarter earnings reports will send shockwaves to the market as earnings prospects have not deteriorated significantly so far, and it will further raise concerns about a recession,” said Charu Chanana, marketing strategist at brokerage firm Saxo in Singapore.