World stocks headed for their worst week since markets’ pandemic meltdown in March 2020, as interest rate hikes in the US and Britain. And a surprise one in Switzerland set investors on edge about future economic growth.
The yen was down more than 1% to 133.88 per dollar in volatile trade. U.S. futures attempted a bounce and Chinese stocks gained. That was set against a week of losses and worry that rate hikes are going to smother growth for years.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell to a five-week low, dragged by selling in Australia where the ASX 200 (.AXJO) dropped 1.8%. Japan’s Nikkei (.N225) fell 1.7% and headed for a weekly drop of almost 7%.
S&P 500 futures rose 0.8% and Nasdaq 100 futures rose 1% but they are well underwater on the week. EuroSTOXX 50 futures rose 1% and FTSE futures rose 0.5%.
World stocks (.MIWD00000PUS) are down 5.7% on course for the steepest weekly percentage drop in more than two years.
Bonds and currencies were jittery after a rollercoaster week.
The greenback was firm on Friday and apart from surging on the yen. It lifted about 0.3% to $1.0518 on the euro and rose about 0.5% to $0.7012 per Aussie .
As well as the Fed and the Swiss central bank, the Bank of England announced a 25 basis point rate rise this week. It was smaller than expected but prompted gilts to sell and sterling to rise on bets that future hikes would come thick and fast.
Sterling rose 1.4% on Thursday and held gains into Friday as it heads for a steady week. Two-year gilts rose 18 basis points on Thursday to 2.143%. U.S. labour and housing data came in soft on Thursday, on the heels of disappointing retail sales figures, with the worries knocking the dollar and helping Treasuries.
Benchmark 10-year Treasury yields fell nearly 10 bps overnight but wobbled higher to 3.2313% during Asia’s morning. Yields rise when prices fall.
Growth fears took oil on a brief trip lower before prices steadied. Brent crude futures were last at $119.70 a barrel. Gold held at $1,844 an ounce and bitcoin was kept under pressure at $20,700.
-Reuters.
