Blog post

Stocks rise on prospect of easing tensions in Ukraine: markets pull back

Content of the article

(Bloomberg) – Stocks rose on Wednesday as traders weighed the prospect of easing tensions over Ukraine and the impact of rising inflation on central bank policies.

Mining and energy companies led a second day of gains in Europe’s Stoxx 600 index, which rebounded off a three-week low on Tuesday. US futures advanced as Russian stocks outpaced global gains on a local currency basis.

Markets extended Tuesday’s rally as Western officials remained cautious, saying they had yet to verify Moscow’s claims that it had begun withdrawing tens of thousands of troops massed along Ukraine’s borders . Investors continue to assess escalating costs and the likelihood of monetary policy tightening in countries like the US and UK, where inflation has taken a surprise jump.

Advertising

Content of the article

Oil rebounded from the biggest one-day loss this year as traders weighed concerns over potential disruptions to commodity supplies. Safe havens like longer-dated Treasuries and gold that has sold off in the past 24 hours were little changed.

Other parts of the global markets are showing continued nervousness. Volatility gauges for the S&P 500 and the Treasury market are sitting well above 12-month averages, a sign that traders remain nervous about risks such as the standoff in Ukraine.

UK inflation unexpectedly accelerated for a fourth consecutive month in January, a surprise that highlights a brutal cost of living crisis that will only get worse this year. Traders await the final minutes from the Federal Reserve later on Wednesday, which could shape their view on how quickly the Fed will raise interest rates and reduce its bond holdings in the months ahead.

Advertising

Content of the article

“Geopolitical tensions should not obscure the fact that rates are trending up,” ING Bank NV analysts led by Padhraic Garvey wrote in a note to investors. “It’s a global trend if there ever was one.”

Meanwhile, the European Union has won the right to use tough new powers to deny Poland and Hungary billions of euros in EU funding for allegedly failing to meet the bloc’s democratic standards. .

In corporate news, Ericsson shares plunged after newspaper Dagens Industri reported that the company’s CEO said he may have made payments to the terrorist organization ISIS in order to gain access to certain transport routes in Iraq.

Here are some key events this week:

EIA Crude Oil Inventory Report, Wednesday FOMC Minutes, Wednesday G-20 Finance Ministers and Central Bank Governors Meet, Thursday-February 18 Cleveland Fed Chair Loretta Mester, St. Louis Fed President James Bullard speak, ThursdayUS. Monetary Policy Forum: Speakers including Fed officials Charles Evans, Christopher Waller and Lael Brainard, Friday

Advertising

Content of the article

For more market analysis, read our MLIV blog.

Some of the major movements in the markets:

Shares

The Stoxx Europe 600 rose 0.3% at 9:20 a.m. London timeS&P 500 futures rose 0.1%Nasdaq 100 futures rose 0.1%Futures on the Dow Jones Industrial Average rose 0.2% The emerging markets index rose 0.7%

Currencies

The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.2% to $1.1379 The Japanese yen was little changed at 115.70 to the dollar The offshore yuan was little changed at 6.3360 for the dollar The British pound rose 0.2% to $1.3567

Obligations

The 10-year Treasury yield was little changed at 2.05% Germany’s 10-year yield was little changed at 0.32% Britain’s 10-year yield was little changed at 1, 59%

Merchandise

Brent crude rose 1% to $94.18 a barrel Spot gold rose 0.2% to $1,856.59 an ounce

©2022 Bloomberg LP

Bloomberg.com

Advertising

comments

Postmedia is committed to maintaining a lively yet civil discussion forum and encourages all readers to share their views on our articles. Comments can take up to an hour to be moderated before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread you follow, or if a user follows you comments. See our Community Guidelines for more information and details on how to adjust your email settings.