2/2 © Reuters. ARCHIVE PHOTO: Men wearing protective masks amid the outbreak of coronavirus disease (COVID-19), use cell phones in front of an electronic whiteboard showing Japan’s Nikkei index outside a brokerage in Tokyo, Japan , June 16, 2022. REUTERS / Kim Kyung-Hoon
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By Carolyn Cohn and Tom Westbrook
LONDON / SINGAPORE (Reuters) – Global equities and benchmark US bonds headed their first weekly gain in a month on Friday, with concerns about economic growth eased by the view that falling commodity prices first could curb rampant inflation.
The week has been marked by sharp falls in commodities amid concerns that the global economy appears volatile and that rising interest rates are hurting growth, leading traders to lower inflation expectations and reduce some bets on the size of the uploads.
“Inflation will remain high and above target, but it is increasingly likely to start peaking in the coming months,” said Andrew Hardy, investment manager at Momentum Global Investment Management.
“Markets could take it reasonably well: there’s potential for recovery later in the year.”
Copper, a benchmark for economic production with its wide range of industrial and construction uses, is heading for its strongest weekly drop since March 2020. It fell in London and Shanghai on Friday and has dropped more than 7% during the week.
The lake fell 9.7% to $ 24,380 a tonne, its lowest level since March 2021 and on its way to a weekly percentage drop of nearly 22%, the largest ever recorded. .
futures fell more than 3% a week to $ 109.70 a barrel and 10% for the month, while benchmark grain prices plunged, with Chicago wheat more than 8% during the week. [O/R][GRA/]
Gold rose 0.29% to $ 1,828.50 an ounce, but was heading for a second consecutive weekly drop.
The falls have offered some relief to stocks, as energy and food have been the engines of inflation. After strong recent losses, MSCI’s global stock index rose 0.3% on the day and 2.4% this week, setting it for the first weekly gain since May.
The U.S. was up 0.7% after major Wall Street indices posted solid gains on Thursday. [.N]
European equities rose 0.82%, on the verge of small weekly gains. increased 0.73%, also showing a small rise during the week.
“While market concerns about a sharp slowdown are to blame for the latest lower movements in commodity prices, lower commodity prices appear to be likely to be exactly what the doctor ordered for the global economy, ”said Brian Daingerfield, NatWest’s market strategist.
“Many of our fears of hard landing are related to concerns that are related to commodity prices.”
The Federal Reserve’s commitment to curbing peak inflation for 40 years is “unconditional,” U.S. Central Bank chief Jerome Powell told lawmakers Thursday, though he acknowledged that interest rates are much higher. highs can increase unemployment.
Germany is heading for a gas shortage if Russian gas supply remains as low as it is now due to the Ukraine conflict, and certain industries would have to be shut down if there is not enough in the winter, he said. say Economy Minister Robert Habeck in Der Spiegel magazine. Friday.
German business morale fell more than expected in June.
Bonds rose sharply in the hope that bets on aggressive rate hikes should be reduced, and two-year German yields fell 26 basis points on Thursday in their biggest drop since 2008.
The 10-year German yield fell 4 bp on Friday after falling 29 bp on Thursday, and was heading for its first weekly drop since mid-May. [GVD/EUR]
The benchmark remained stable at 3.0666% after falling 7 bp on Thursday and [US/]
Bond funds suffered their biggest outflows from April 2020 during the week to Wednesday, while stocks lost $ 16.8 billion as markets were trapped in the bearish maximum mode, showed Friday’s weekly BofA flow analysis.
The U.S. dollar has fallen from a 20-year high last week. It remained stable at $ 1.0529 per euro and fell 0.2% to 134.67 yen. [FRX/]
The battered yen has stabilized this week and gained some support on Friday from Japanese inflation which topped the Bank of Japan’s 2% target for the second month in a row, further putting pressure on its ultra-easy political stance.
The broader Asia-Pacific stock index outside of Japan rose 1.1%, helped by short sellers coming out of Alibaba (NYSE :), which rose nearly 6%, amid indications that China’s technological repression is diminishing.
increased by 1.2% for a weekly increase of 2%.