European shares rise, dollar slips as market selloff pauses
Send a link to a friend
[June 21, 2022] By
Elizabeth Howcroft
LONDON (Reuters) - European shares opened
higher on Tuesday, recovering slightly from last week's 17-month lows as
the selloff paused, but major central banks' rate hike plans and global
recession risks kept investors cautious.
World stocks have edged higher so far this week, recovering from last
week's sharp selloff which saw global equities tumble to their lowest
since November 2020 as expectations for central bank policy tightening
to combat high inflation prompted investors to ditch risky assets.
At 0750 GMT on Monday, the MSCI world equity index, which tracks shares
in 50 countries, was up 0.5% on the day.
Europe's STOXX 600 was up 1% and London's FTSE 100 was up 0.6%.
Still, analysts expect the bounceback to be short-lived. Timothy Graf,
head of macro strategy for EMEA at State Street Global Markets, said the
move higher was likely a result of markets being oversold in recent
weeks and relief that event risks, such as the Bank of Japan and Swiss
National Bank meetings, have passed.
“I think it’s a pause in what is still a trend where you have this
rising probability of slowing growth, high inflation – stagflation
potentially – outcome,” he said.
![](http://archives.lincolndailynews.com/2022/Jun/21/images/ads/current/LPL_small%201.gif)
“Equity markets and the earnings prospects for corporates I don’t think
have really taken that on board.”
Earlier in the session, the Reserve Bank of Australia's governor Philip
Lowe signalled more rate hike increases and said that inflation was
expected to reach 7% by the end of the year.
Germany's BDI industry association slashed its economic forecast for
2022 and said that a halt in Russian gas deliveries would make recession
in Germany inevitable.
[to top of second column] |
![](../images/062122PIX/busine45.jpg)
Signage is seen outside the entrance of the London Stock Exchange
in London, Britain. Aug 23, 2018. REUTERS/Peter Nicholls
![](http://archives.lincolndailynews.com/2022/Jun/21/images/ads/current/debbiesfloral_lda_053122_2022.png)
European bond yields rose, with the benchmark 10-year German yield up 8 basis
points on the day at 1.736%.
In currency markets, the euro was up 0.5% at $1.0561, while the U.S. dollar
index was down 0.4% on the day at 104.07.
The U.S. 10-year yield was at 3.2882%, down from last week's peak of 3.495% -
its highest since 2011 - which came the same day the Fed raised interest rates
by a massive 75 basis points.
The Japanese yen, which has fallen sharply in recent months, was steady at
around $135.19.
Japan's Prime Minister said that the central bank should maintain its current
ultra-loose monetary policy. This makes it an outlier among other major central
banks.
Oil prices rose as investors focused on tight supplies of crude and fuel
products. Brent crude futures were up 1.1% at $115.38 while U.S. West Texas
Intermediate (WTI) crude futures were up 1.9% at $111.63.
Gold was little changed at around $1,838 an ounce.
Bitcoin was at around $21,000, having stabilised slightly since it plunged to as
low as $17,592.78 at the weekend. Cryptocurrencies have increasingly become a
metric of risk appetite, State Street's Graf said.
(Reporting by Elizabeth Howcroft; Editing by Louise Heavens)
[© 2022 Thomson Reuters. All rights
reserved.]This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](http://archives.lincolndailynews.com/2022/Jun/21/images/ads/current/charrons_bch_2022.png) |