Shares see sharp decline since 2020 as central banks move into markets

  • The BOJ is atypical, as major central banks raise rates
  • Investor fears of recession are growing
  • US stocks will start to pick up; The S&P 500 is up 0.9%

LONDON, June 17 (Reuters) – Global equities are heading for their worst week since the market pandemic fell in March 2020, as major central banks doubled their toughest policy in an effort to control inflation, putting investors on the margins of future economic growth.

The largest rate hike in the United States since 1994, Switzerland’s first such rate in 15 years, a fifth British rate hike since December and a European Central Bank measure to bolster southern debt before future rises alternated in moving markets.

The Bank of Japan was the only one atypical in a week in which monetary prices rose around the world, sticking to its 10-year yield strategy close to zero on Friday. Read more

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After a week of strong movements among asset classes, global stocks (.MIWD00000PUS) fell flat on Friday to bring weekly losses to 5.5% and leave the index up for the weekly percentage drop further. strong in more than two years.

Overnight in Asia, the dollar rose 1.9% against the yen to 134.70 in volatile trading, while the broader Asia-Pacific equities index outside Japan (.MIAPJ0000PUS) fell to a five-week low, dragged down by sales in Australia. Japan’s Nikkei (.N225) fell 1.8% to a weekly low of almost 7%.

The S&P 500 futures were up 0.8% and the Nasdaq 100 futures were up 1.2%, although both remain well underwater during the week.

“The more aggressive line of central banks increases headwinds for both economic growth and equity,” said Mark Haefele, investment director at UBS Global Wealth Management. “The risks of a recession are rising, while a soft landing is being made for the United States. The economy seems increasingly difficult.”

Data from Bank of America analysts showed that more than 88% of the stock indexes that remain trading below their 50- and 200-day moving average, the leading markets “have painfully survived.”

ONE WAY

Bonds and coins were nervous after a week of roller coaster rides.

U.S. job and housing data was soft on Thursday, following disappointing retail sales figures with concerns that hit the dollar and helped Treasuries. Read more

U.S. Treasury yields at 10-year benchmark fell nearly 10 basis points overnight, but were last at 3.2200%. Yields increase when prices fall.

However, bond yields in southern Europe fell sharply on Friday after ECB President Christine Lagarde reported more details on her plans to develop a tool to support yields.

The 10-year yield in Germany, the benchmark for the euro area, was last at 1.66%.

In recent sessions, the dollar has fallen from a 20-year high, but has not fallen sharply and rose 0.5% last year, nearing the end of a stable week against a basket of currencies.

The pound rose 1.4% on Thursday after a 25 basis point rise in the rate and fell 0.5% last, as it moves towards a stable week. The two-year golds were the last at 2.091%.

“Despite the seemingly calm nature of today’s markets, investors will need to move from a soft to a hard landing strategy, which means they will have to be defensive or eliminate risk altogether.” Stephen Innes, managing partner of SPI Asset Management. dit.

Growth fears drove oil down in a short trip before prices settled. Brent crude futures were last at $ 120.40 a barrel. Gold extended intraday losses by 0.6% to $ 1,848 an ounce, while bitcoin rose 2.8% to $ 20,943.

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Additional report by Tom Westbrook; Editing by Lincoln Feast, Angus MacSwan and Andrew Heavens

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