Equities, dollar easing on growth, inflationary concerns

  • US questions China over Phase I trade deal
  • Friday’s jobs report weighs on the market
  • Oil soars, adding pressure on inflation outlook

NEW YORK, Oct.4 (Reuters) – The dollar eased and the gauge of global stock markets fell on Monday as investors worried about the potential for further trade tensions between the United States and China, the halt talks in Congress and rising inflation as oil prices soared. peaks of the year.

Yields on the US Treasury rose on investor caution about the need to raise the government debt ceiling as the US faces the risk of a historic default in two weeks. Read more

Oil surged after Reuters said the Organization of the Petroleum Exporting Countries and its allies would stick to their current production policy instead of boosting supply further. Read more

Brent crude futures were up $ 1.98 to $ 81.26 per barrel, while US crude rose $ 1.74 to $ 77.62 per barrel.

New orders for products made in the United States accelerated in August, reflecting continued strength in the manufacturing sector even as economic growth appeared to slow in the third quarter due to shortages of raw materials and labor. artwork. Read more

The manufacturing sector is still hampered by global supply chain problems, while data last week showed high inflation slashed consumer spending sharply in July, with a moderate rebound in August.

“The negatives have been mounting and accumulating for several weeks during this downturn that we have seen,” said Tim Ghriskey, chief investment strategist at Inverness Counsel.

US trade negotiator Katherine Tai has pledged to lift some tariffs imposed by former President Donald Trump on goods from China while urging Beijing to keep its promises. Read more

Tai said Washington is seeking to stop China from pouring billions of dollars in state subsidies into its semiconductor, steel and other industries.

“In the past, escalating trade tensions between the United States and China have created risks for investors,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

MSCI’s All Country World Index (.MIWD00000PUS) fell 1.0% to 705.53, its lowest close since May 21, while the large STOXX Europe 600 index (.STOXX) closed in decrease of 0.47%.

At the end of its session on Wall Street, the US Senate prepared to vote on a bill passed in the House of Representatives that would extend the US debt limit until December 2022, thereby eliminating a deadlock in Congress that has destabilized investors.

Earlier, President Joe Biden said that a $ 3.5 trillion social spending bill that was blocked last week in Congress will be smaller than progressive lawmakers would like. Read more

The Dow Jones Industrial Average (.DJI) fell 0.94% to 34,002.92, the S&P 500 (.SPX) lost 1.30% to 4,300.46, and the Nasdaq Composite (.IXIC) fell by 2.14% to 14,255.49 as investors ditched Big Tech stocks in the face of rising Treasury yields.

The dollar weakened from one-year highs last week as investors eagerly awaited the release of jobs data on Friday, which could signal when the Federal Reserve will begin to cut back its purchases of ‘assets.

Gold prices peaked more than a week on the weak US currency and risk sentiment in equity markets boosted demand for the safe haven metal.

The dollar index, which tracks the greenback against a basket of six currencies, fell 0.15% to 93.805.

The euro rose 0.22% to $ 1.162, while the yen traded 0.11% to $ 110.930.

U.S. Treasury yields rose as the market worried about the debt ceiling, social spending bills and obstacles to infrastructure legislation.

“The market is really focused on Washington, DC, and the uncertainty of not being able to agree on the infrastructure, the social spending plan and raising the debt limit,” said Thomas Hayes, Managing Member of Great Hill Capital LLC.

The yield on 10-year US Treasuries rose 1.5 basis points to 1.4824%, after trading above 1.5%.

Adding to concerns about growth, investor sentiment in the eurozone fell for the third consecutive month in October. Read more

Actual vs Estimates
Core PCE inflation at its highest for 30 years

Reporting by Herbert Lash; additional reporting by Sujata Rao in London, Hideyuki Sano in Tokyo; Editing by David Gregorio, Sonya Hepinstall and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.


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