Stock markets around the world posted new highs even as rising inflation rates prompted Fed policymakers to issue hawkish remarks on upcoming rate hikes, treasury notes are on track for multi-year record yield percentages, and the war rages on in Ukraine.
U.S. markets ended Tuesday on a positive note, with the Dow finishing 0.74 percent higher, S&P 500 climbing 1.13 percent and Nasdaq registering 1.95 percent increase. The pan-European STOXX 600 has since decreased, opening today at 459.38, and is trading at 456.25 as of 8:30 a.m. EDT, a decline of over 0.68 percent. 10-year treasury yield is currently at 2.38 percent, a high not seen since 2019, and is on track for the biggest monthly jump since 2004.
FTSE 100 rose on opening and then fell 18 points to trade at 7467.4, while the German DAX fell 179 points to trade at 14352.75, a decline of over 1.2 percent.
Apple, Amazon, and Alphabet all ended Tuesday’s trading more than 2 percent higher, driving the upward trends on S&P 500 and Nasdaq. Tesla, however, was the biggest winner as shares gained over 30 percent over the past month with the share price currently trading at 993.98. The recent opening of a new gigafactory in Europe played a big part in boosting investor confidence.
After yesterday’s volatility, Brent is rebounding after opening at 113.75, and is currently trading at 115.71, an increase of 1.72 percent. The hike is mostly bolstered by talks on possible Russian energy sanctions by the European Union and signs of supply disruptions from Kazakhstan.
U.S. West Texas Intermediate (WTI) crude futures are up 2 points, trading at $112.76 a barrel.
President Joe Biden might urge Europe to follow suit and sanction Russian oil and gas when he meets bloc leaders on Thursday in Brussels, but doubts remain as to how many will concede.
Big economies like Germany depend considerably on Russian energy and the country is pushing back against a unified embargo effort. Biden is expected to initiate new sanctions against hundreds of Russian parliament members during the trip.
Adding to supply woes is the plunging inventory stockpiles in the United States where the latest data from the American Petroleum Institute industry group reveal stocks down by 4.28 million barrels on the March 22 report.
“An embargo on Russian oil would increase the likelihood of Russia turning off the gas tap to Europe in return,” Ulrich Leuchtmann, head of FX research at Commerzbank, wrote, saying this could lead the continent possibly into a recession.
EUR/USD is currently trading at 1.0989 after opening at 1.1026, falling 0.34 percent.
GBP/USD is at 1.3194 after opening at 1.3284. British inflation shot to the highest level in 30 years last month tightening household finances which were already suffering from high energy prices.
Bitcoin is trading at $42,325 increasing $240 from today’s opening.
Some key developments to look forward to on Wednesday include NATO chief Stoltenberg’s press conference, Fed talks with Chairman Jerome Powell and San Francisco Fed’s Mary Daly, and U.S. new home sales data.
