Written by Herbert Lash and Dara Ranasinghe
New York / London January 25 (Reuters) – A gauge of global stock markets fell from five-month highs and Treasury yields rose on Wednesday as corporate results fueled recession fears, overshadowing recent optimism that the Federal Reserve may soon back away from tightening monetary policy.
Microsoft Corp MSFT.Odull look Late Tuesday, it signaled more gloom ahead for the tech sector after a major cautioned customers against spending in an uncertain economy.
pessimist Results from Boeing On Wednesday amid persistent supply chain constraints adding to inflation fears, the resilient labor market pressure is likely to keep the Federal Reserve vigilant about crushing inflation.
“The enemy is inflation, the catalyst is the job market and that’s the bottom line,” said Johann Grahn, head of ETFs at Allianz Investment Management in Minneapolis.
“While we see some changes, they are not significant enough to scare the Fed away from the announced march orders,” he said.
Dow Jones Industrial Average .DJI The S&P 500 fell 0.8% .SPX Decreased by 0.97% and the Nasdaq Composite Index nineteenth slipped 1.26%.
Trade in European stocks was lackluster, as signs of an improving economic outlook in the Eurozone fueled concerns about further interest rate hikes.
The pan-European broad STOXX 600 index .STOXX It lost 0.29% and the MSCI measure of the performance of global stocks .MIWD00000PUS down 0.59%.
The fastest tightening of monetary policy since the 1980s prompted investors to balance inflation fears against recession fears, sending markets higher and then lower.
the Bank of Canada noted Further gains are likely to be halted after the key rate hike to 4.5% on Wednesday.
Earlier, the Australian dollar recorded the highest level in five months, as the increasing inflation data boosted the case To get another rate hike from the Reserve Bank of Australia (RBA) next month.
In Asia, MSCI’s broadest index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS It reached its highest level in seven months. Trading volume fell as the Chinese and Taiwanese markets remain closed for the Lunar New Year holidays.
Long-term Treasury yields rebounded ahead of the Fed’s policy-setting meeting next week. The futures contract is priced at a probability of 94.7% of a 25 basis point rise.
The yield on the 10-year Treasury note US10YT = RR It rose 1.5 basis points to 3.482%, but well below the Fed’s forecast that its target rate would remain above 5% next year.
The rise of the Australian dollar
The Australian dollar rose to $0.7123 Australian dollar = D3 After the latest inflation data. The Australian currency is rising 1.6% This week, it is preparing for its biggest weekly gain in more than two months.
The Canadian dollar fell 0.36% against the dollar at 1.34 per dollar following the central bank’s forecast.
euro EUR = It rose 0.03%, to $1.0888.
Data appears German business morale improved In January it did little to push the single currency higher for the time being.
Germany’s Ifo institute said its business climate index rose to 90.2, in line with the consensus, according to a Reuters poll of analysts, and up from 88.6 in December.
Oil prices rose slightly on light volumes after government data showed a smaller-than-expected build in US crude inventories, in the face of weak economic data from Tuesday.
US crude futures CLc1 It recently rose 1.01% to $80.94 a barrel, Brent crude LCOc1 It was at $86.68, up 0.64% on the day.
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(Editing by Bernadette Baum)
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