Increase inventory as commodity slides provide relief for inflation concerns

© Reuters. File Photo: A man wearing a protective mask during an outbreak of coronavirus disease (COVID-19) electronically displays the Japanese Nikkei Index outside a Japanese securities firm in Tokyo on June 16, 2022. Use your mobile phone in front of the board. REUTERS / Kim Kyung-Hoon

Tom Westbrook

Singapore (Reuters)-While growth concerns have been dragged into the product, investors have bet to bring inflation to the central bank, so both equities and bonds are heading for the first weekly profit of Friday’s month. I went.

The bell of wide-ranging economic production, with a wide range of industrial and construction applications, fell by 3% in Shanghai and by more than 7% in a week. This is the sharpest weekly decline since the pandemic-led financial markets collapsed in March 2020.

Oil also fell overnight, with futures down 2% a week to $ 110.62 a barrel. Benchmark grain prices, meanwhile, fell by nearly 9% in a week for Chicago wheat at $ 9.42, the lowest since March. [O/R][GRA/]

Falling prices have led to some relief from stocks, as energy and food are the driving force of inflation. After the recent big losses, MSCI’s World Equity Index rose 2% that week.

MSCI’s widest non-Japanese Asia Pacific stock index rose 1% on Friday. Alibaba (NYSE :)-Rised by 5%, suggesting that China’s crackdown on technology is weakening.

It rose 0.8% with a 1.6% rise every week and remained flat after the index rose about 1% overnight. The US dollar has remained slightly below its 20-year high against a basket of major currencies.

Brian Daengerfield, market strategist at Nat West (LON :), said, “Market concerns about the recent sharp slowdown are the cause of the fall in raw material prices, but the fall in commodity prices has been ordered by doctors to the global economy. It feels the same as it did. ” ..

“Many hard landing concerns are related to commodity price-related concerns.”

This week’s soft data was the cause.

Factory activity gauges in Japan, the United Kingdom, the Eurozone and the United States all softened in June, and US producers reported a complete decline in new orders for the first time in two years in the face of weak confidence.

Bonds rebounded violently in hopes of reducing bets on aggressive rate hikes, with Germany’s two-year yields down 22 basis points, the largest drop since 2008. [GVD/EUR]

The 10-year Treasury yield on the benchmark fell 7bps overnight and remained stable at 3.0944%. [US/]

The US dollar has fallen from its recent highs, but not too far, as long as investors remain cautious. At the end, it was fairly stable at 1.0529 dollars per euro, and I bought 134.79 yen. [FRX/]

The depreciation of the yen has been stable this week, with some support from Japan’s inflation, which has surpassed the Bank of Japan’s 2% target on Friday for the second straight month, putting further pressure on its ultra-simple policy stance.

Speakers of the European Central Bank and the Federal Reserve Board will be closely watched later in the day, as well as UK retail sales data and German corporate confidence. Beyond that, the main concern is what that means for the company’s performance.

“The second-quarter earnings report has shocked the market and raises concerns about a recession, as earnings outlook hasn’t deteriorated significantly so far,” said Char Chanana, market strategist at Singapore brokerage firm Saxo. It will be even stronger. ”

Increase inventory as commodity slides provide relief for inflation concerns

Source link Increase inventory as commodity slides provide relief for inflation concerns

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