Shares rise, US interest rates fall while markets wait for interest rates to rise from the Fed

NEW YORK / MILAN, May 3 (Reuters) – A measurement of global stock markets rose on Tuesday as 10-year US government yields fell from 3% as investors remained cautious, expecting the Federal Reserve to raise interest rates the most in a single day ago 2000 to curb inflation.

Data on inflation concerns showed that US job openings broke records in March as the shortage of workers persisted. This suggested that employers may need to increase wages, which is likely to increase consumer prices. read more

Investors expect the Fed to raise interest rates by half a percentage point on Wednesday, detailing plans to reduce the balance sheet to $ 8.9 trillion. The US Federal Reserve raised its key interest rate by 25 basis points in March.

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Major stock indices in Europe rose, but Wall Street rose less as traders prepared for a potentially more aggressive decision by decision-makers on Wednesday.

“The Fed is not going to worry if these next rate hikes eventually start to hurt growth and lead to some job losses, because right now the economy is on solid ground,” said Ed Moya, senior market analyst at OANDA.

MSCI’s world index for all countries (.MIWD00000PUS) rose 0.39% and the pan-European STOXX 600 index (.STOXX) rose 0.53% the day after a “flash crash” in Nordic markets caused by a trade involving a single Citigroup sales order.

The Dow Jones Industrial Average (.DJI) closed up 0.2%, the S&P 500 (.SPX) rose 0.48% and the Nasdaq Composite (.IXIC) rose 0.22%.

“We could get a dead-cat bounce after the Fed meeting if it’s no more hawkish than the market has feared,” said Jimmy Chang, chief investment officer at Rockefeller Global Family Office, “but I think the broader trend is still very cautious. action pages. “

Nine of the S&P 500 sectors rose, led by a 2.87% increase in energy (.SPNY), while oil and gas (.SXEP) jumped 4.1% in Europe to lead the markets there.

Overnight in Asia, Australia’s central bank raised its key interest rate by 25 basis points higher than expected, lifting the Australian dollar as much as 1.3% and hitting local equities.

The Bank of England is expected to raise interest rates on Thursday for the fourth time in a row.

Asian stocks on Tuesday were largely stable in holiday-thin trading, with both Chinese and Japanese markets closed. But in Hong Kong, Alibaba (9988.HK) shares fell as much as 9% due to concerns over the status of billionaire entrepreneur Jack Ma.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, USA, May 3, 2022. REUTERS / Brendan McDermid

A state media reports that the Chinese authorities took action against a person named Ma hit the stock hard, but it recovered losses after the report was revised to make it clear that it was not the company’s founder. read more

Germany’s 10-year reference rate The Bund rose to 1% for the first time since 2015, before retreating as a precaution ahead of expected rate hikes in the US and UK this week.

The yield on 10-year government bonds fell 1.5 basis points to 2.981%, after breaking the 3% key milestone for the first time since December 2018 on Monday.

The dollar fell against a basket of major currencies as investors weighed how much of the Fed’s expected move to raise interest rates this week and beyond had already been priced in.

The dollar, which has been supported by safe-haven purchases due to concerns about the economic outlook, remained just below the highest level of almost two decades reached in April, and the euro remained above its lowest level in over five years. last month.

The dollar index fell 0.106%, while the euro rose 0.17% to $ 1.0522. The Japanese yen was slightly changed at 130.16 per dollar.

Oil fell as demand concerns over China’s prolonged COVID shutdowns offset support from a possible European oil embargo against Russia over the war in Ukraine.

US crude futures fell $ 2.76 to $ 102.41 a barrel, while Brent fell $ 2.61 to settle at $ 104.97 a barrel.

Copper and aluminum prices fell sharply as weak production data on Monday, COVID-19 outbreaks in China and rising prices created fears that demand for metals will decline.

Gold strengthened and followed a slight decline in government interest rates and the dollar, while investors saw an aggressive rate hike from the Fed on Wednesday.

US gold futures rose 0.4% to $ 1,870.60 per ounce.

Bitcoin fell 2.56% to $ 37,535.85.

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Reporting by Herbert Lash, additional reporting by Danilo Masoni in Milan; Edited by Alexander Smith, Bernadette Baum and David Gregorio

Our standards: Thomson Reuters Trust Principles.

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