Categories: EconomyNews

Global markets nearing a two-month high, while crude oil is rising

Published by
Nonhlanhla P Dube

Gold was trading at $1,790.82 per ounce.
On Friday, Asian stocks rose alongside US market futures, aided by a gain in technology shares, and oil reversed its decline as investor sentiment stabilized following another rocky week.

An Asian equity index gained 2 %, while the S&P 500, Nasdaq 100, and European contracts gained slightly. Taiwan recovered from losses caused by the visit of US House Speaker Nancy Pelosi, a jump that may have helped the overall mood.

The 10-year Treasury yield remained stable at 2.68 % while the dollar rose slightly. The inversion between two-year and 10-year rates has been maintained at its steepest level since 2000, reflecting concerns of a recession as monetary policy tightens.

The US central bank’s aim is to keep inflation under control by Thursday, Loretta Mester, President of the Cleveland Federal Reserve Bank, underlined. Interest rate hikes are fueling economic anxiety and depleting assets like oil, which has recovered but remains below R1500 per barrel, levels last seen before Russia invaded Ukraine. A global equity index is on track for its third weekly advance and is closing in on a two-month high in its recovery from bear-market lows, aided by solid US company profits. As borrowing costs rise, the duration of the rebound is called into question.

“It’s a little early to say the risk has been eliminated,” Carol Schleif, deputy chief investment officer at BMO Family Office, said on Bloomberg Television. According to her, a “significant slowing” of the US economy is beginning.

The next important data point for investors will be Friday’s US payrolls. According to Anna Wong, Bloomberg Economics’ senior U.S. economist, hiring likely slowed in July, but the labour market is consistent with an expanding rather than a recessionary economy, and the Fed will continue to raise interest rates.

Separately, Democrats reached an agreement on a revised version of their tax and climate measure, which includes a new 1% excise tax on stock buybacks.

Investors are also keeping an eye on the effects of Pelosi’s trip to Taiwan. China, which considers the self-ruled island to be part of its territory, is said to have fired missiles over Taiwan during military manoeuvres, a significant escalation if confirmed.

In India, the central bank raised interest rates for the third time since May in a bid to contain inflation and protect the rupee. Bond yields and the currency both increased.

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Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

Published by
Nonhlanhla P Dube
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