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Bloomberg
Stocks rise on Tuesday as cease-fire talks between Russia and Ukraine helped fuel risk appetite.
The Stoxx Europe 600 Index advanced, with auto and consumer stocks outperforming. US equity futures climbed after benchmarks rose for a third session. Oil reversed earlier declines as investors weighed the impact of China’s mobility curbs against a Covid-19 resurgence on demand.
Government bond yields rise, with bets on aggressive US monetary tightening hurting shorter maturity Treasuries. Inversions along the curve, where some short-term rates exceed longer tenor yields, point to concerns about a looming economic downturn as the Federal Reserve hikes interest rates to quell high inflation.
The yen rises from around a six-year low against the dollar amid divergence between the Fed and a dovish Japanese central bank. The latter continued with bond-market intervention to cap a surge in yields.
Among individual moves, Barclays Plc falls as a shareholder sold about 900 million pounds ($1.2 billion) of stock, a day after the lender revealed a costly blunder in how it sold billions of dollars in securities.
Global shares are up about 8% from the lows reached after Russia invaded Ukraine. Such resilience contrasts with a rout in bonds and inverting yield curves, which are shaking economic confidence. Investors are trying to parse developments in the war, elevated commodity costs and the Fed’s fight against price pressures.
“It makes sense to think about those growth risks, but more form a slowdown perspective and not a recession perspective for this year,†Julia Wang, JPMorgan Private Bank global market strategist, said on Bloomberg Television.
For Asia, Wang said there are two tailwinds in the next couple of months — Fed hike expectations are closer to being priced in, and Chinese policy makers have pledged to support markets and economic growth.
After data showed consumer sentiment in Germany falls to lowest level in more than a year, focus later will be on euro zone inflation data, with figures expected to confirm that consumer prices surged in March at the fastest pace on record.
In the latest geopolitical developments, Ukraine is striving for a cease-fire agreement in talks with Russian negotiators that started on Tuesday in Turkey and has a “minimum†goal of an improvement in the humanitarian situation.
Meanwhile, Russia made a $102 million interest payment as it continues to service its foreign bonds despite financial isolation since its invasion of Ukraine.