Global stocks brace for consecutive weekly gains for the first time in 2022

A woman stands in front of a screen showing the average share of Japan’s Nikkei stock index, stock market indices in the United States and other countries outside a brokerage in Tokyo, Japan, December 19, 2018. REUTERS/Issa Kato

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LONDON (Reuters) – Global stocks are heading for a second straight week of gains for the first time in 2022 although sentiment was broadly cautious as markets assessed the economic risks from Fed policy tightening and Russia’s war in Ukraine.

Technology stocks in Hong Kong (.HSTECH) He led the losers and reduced his weight on the broader market after US regulators said recent media speculation about an imminent deal that would prevent hundreds of Chinese companies from launching from US exchanges was “premature”. Read more

Although global PMI data for March this week showed that the global economy was broadly resilient, investors have turned increasingly bearish in terms of the economic outlook. Barclays, for example, lowered its forecast for global economic growth this week to 3.3% while traders raised their short bets.

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Global bond markets were still in the grip of one of the worst selloffs in recent memory, while gauges of market volatility threw mixed signals. Nickel, which is the counter to market volatility, rose 9% on Friday after hitting the daily trading limit of 15% in the previous two sessions.

“I think the quarter-end and fiscal year end in Japan next week will give a clearer reading of the resilience of risky assets and currencies in a bear market in bonds and the possibility of an acceleration of Fed tightening in May,” said Kenneth Brooks. Forex Strategist at Societe Generale in London.

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The benchmark 10-year US Treasury yield, which led the broader sell-off in the bond market, settled at 2.34% on Friday after hitting a three-year high above 2.41% this week. Yields rose 75 basis points in the past two weeks as traders quickly revised their expectations for rate hikes.

While Treasuries remained on track for one of their worst quarterly trajectories since at least the early 1970s, the dollar benefited from the story of a widening interest rate differential with the Japanese yen briefly dropping to its lowest level in late 2015 at 122 yen to the dollar.

The broader dollar index took a breather on Friday but was on track for a small weekly gain.

Markets are expecting up to 190 rate hikes for the remainder of the year after the US interest rate hiked by 25 basis points last week. Investors are setting an 88% probability of a 50 basis point rate hike in March.

Charles Evans, president of the Chicago Fed, was the latest US policymaker to sound hawkish, saying on Thursday that the Fed needs to raise interest rates “in time” this year and in 2023 to curb high inflation before it becomes part of the economy. Integral with American psychology and become equal. Difficult to get rid of. Read more

Demand for safe haven assets including gold and the Swiss franc remained resilient as the conflict in Ukraine showed no signs of slowing. Ukrainian forces retake towns east of the capital, Kyiv, and Russian forces trying to capture the city are retreating on extended supply lines. Read more

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Spot gold remained higher at $1,959 an ounce, flat during the day.

Overnight, the three major US stock indexes rose more than 1%, as investors snapped up battered stocks from chip makers and growth big names backed by lower oil prices.

Oil continued to fall slightly on Friday, as the United States and its allies considered releasing more oil from storage to calm markets. Brent crude fell 1.3% to $117.78 a barrel, and US crude fell 1.6% to $110 a barrel, but prices are still very high by historical standards.

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(Sikat Chatterjee report). Additional reporting by Elon John in Hong Kong; Editing by Raisa Kasulowski

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