After the tightening moves of the central banks, a 2-10-year yield gap opens in the USA and Germany. Stocks are heading for weekly losses globally.
As central banks increase the dose of tightening, there is a global decline in stock markets.
The MSCI World Index is heading for its steepest weekly drop since March 2023, losing over 1%. Returning from a holiday in Asia, the Hong Kong Hang Seng index is losing close to 2 percent. Futures on the S&P 500, which closed Thursday with a rise of 0.4 percent, decreased by 0.4 percent, reflecting low risk appetite.
After Powell’s statements, the US 2-year bond yield reached its March peaks with 4.78 percent. The risk aversion motive is also reflected in the currency markets.
The Bloomberg Dollar Index is on track to record its fastest weekly gain in a month, up 0.6 percent. This morning, against the dollar, the currencies of commodity exporting countries such as the Australian dollar and Norwegian krone are weakening.
Brent oil tumbled nearly 4% on Thursday amid concerns that higher interest rates will curb demand. Brent is also down 1.2 percent this morning at $73.26. An ounce of gold is up 0.1 percent in the spot market and is at $1,915.