World stocks in red as consumers point to a further downturn

London / Tokyo, June 29, 2010 (FBC) For the second straight day, international stock markets slumped and bond yields plummeted.

A series of weak reports in Europe and the United States did not prevent central banks from doubling their rhetoric. Later on Wednesday, officials from the European Central Bank, the US Federal Reserve and the Bank of England may speak more at the Central Bank forum.

Data on Tuesday saw U.S. consumer confidence fall to a 16-month low, but many Fed policy makers have promised faster interest rates, read more “unbridled” inflation.

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Those US figures, following the worst consumer confidence data across Europe, sent down Wall Street to lower S&P 500 and Nasdaq indexes by 2% and 3% (.SPX), (.QQ11).

That weak gauge took place on Wednesday, with the former Japan Index falling 1.4% (.MIAPJ0000PUS) and a three-day rally lowering the Pan-European equity index (.STOXX) by 0.3%.

US and German 10-year bond yields slipped 5-6 base points, down from their previous high of 30 bps in mid-June.

Consumer sentiment is a clear sign of the economic downturn, City has told customers.

Following the 7.5% -7.9% annual inflation index in the German states, the country is expected to have a June 8% reading in May compared to 7.9% in May.

Paul O’Connor, head of Janus Henderson’s multidisciplinary group in London, predicts “hurricane” markets as long as there are signs of growth.

“The problem is that inflation is so problematic in many parts of the world that we are too far away to say that the central bank is done,” Okonnor said.

“Of course we will see a slowdown in the summer but it will increase awareness of the risk of a fall and I don’t think the markets are fully worth it.”

In the news on Tuesday, the mood rose on Tuesday. With its zero zero COVID strategy, China has been easing quarantine requirements for incoming passengers. [nL1N2YF06Q]

As Chinese stock markets, including real estate, extended long-term gains on Wednesday, the positive impact of the news was largely noticeable – China’s blue chips fell sharply on Tuesday to 1.5 percent and Hong Kong lost 2 percent (.CSI300), (HSI).

“Markets are bound to respond to such news,” said Carlos Casanova, UBP’s chief economist in Hong Kong. “In order for that to last, we want to see these steps properly reopened.”

The future of Wall Street is flat,.

Oil and dollars

Inflation concerns have been rising for three consecutive days, pushing Brent crude to more than $ 117 a barrel.

RBC Capital Mike Tran told clients:

The Organization of the Petroleum Exporting Countries (OPEC) has begun a two-day meeting on Wednesday, but it does not appear to be a major policy change, with UAE Energy Minister Suhail al-Mazrui saying his country will be closer to capacity. Read more

Market fluctuations are driving the dollar bidding in a new way, compared to the one-week-old basket.

The euro fell 0.6% on the greenback overnight, but was flat at $ 1.0514 at 0830 GMT, not far from last week’s 13-year low of 136.7 against the dollar at 136.13.

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Sam Bayford in London, Sujata Rao and Tokyo; Corrected by Nick Macfie

Our standards are published in The Thomson Reuters Trust Principles.


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