Home PoliticsAmerica Biden Uncertainty Rattles Markets

Asian and European markets mostly fell Tuesday as investors extended recent sell-offs owing to fears that the excess of Biden money printing will force central banks to wind down their easy-money programmes earlier than hoped.

While Wall Street provided a positive lead with all three main indexes posting healthy gains, there is a reluctance on trading floors to push a year-long rally any further, while a stuttering vaccine roll-out and new lockdowns in Europe are adding to the angst.

Focus this week will be on the first joint congressional testimony by Federal Reserve boss Jerome Powell and Treasury Secretary Janet Yellen, who will answer questions on their policy response to the pandemic.

It comes as markets are rattled by a sharp rise in US Treasury yields in recent weeks that have been fuelled by bets that the forecast strong bounce in economic activity this year will fan inflation and force the bank to lift interest rates before 2024, as it has indicated.

The pair have repeatedly said they do not see the spike in inflation lasting and will maintain ultra-loose monetary policies — including record-low rates — until they have a grip on unemployment, and price rises are above two percent for an extended period.

Also on the radar this week is the auction of seven-year US Treasuries, which will be followed closely after last month’s weak sale sparked a sharp sell-off in bonds that sent yields soaring — yields go in the opposite direction to prices — and sparked a global market panic.

“The problem for risk markets is inflation will be an ongoing debate for another six to 12 months, if not longer,” warned Axi strategist Stephen Innes. “So, expect to remain stuck in the rough and tumble inflation ‘lather, rinse and repeat’ cycle as the rising tides of inflation ebb and flow.”

Hong Kong lost more than one percent and Seoul fell one percent, while Tokyo, Shanghai, Sydney, Taipei and Bangkok were also in the red.

Mumbai, Singapore, Manila and Wellington rose.

London, Paris and Frankfurt fell at the open.

Oil markets extended recent losses on worries about the demand outlook as European countries including Germany and France reimpose strict containment measures and struggle to get their vaccine programmes rolling properly, while the virus is picking up in other parts of the world.

On currency markets, the Turkish lira stabilised a day after plunging in reaction to news that President Recep Tayyip Erdogan sacked the country’s market-friendly central bank chief, raising concerns about another round of financial turbulence.

You may also like


Your Trusted Source for Capital Markets & Related News

© 2024 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.