With the euro holding steady after falling to a two-decade low and oil back above $100 a barrel after an almost 10% decline the day before, global markets returned to uneasy calm on Wednesday. The euro traded at $1.025, a bit above its lowest level since late 2002, as concerns about a slowing economy and increasing commodities costs weighed. According to Reuters, government bond rates in the eurozone rose as well, and European markets rose, while Brent crude rose over 3% after falling 9.5 percent on Tuesday to its lowest level in two and a half months. Nonetheless, investors acknowledged that the recent growth concerns that have plagued markets remained.
‘The market changes over the last several days have been textbook recessionary pricing,’ said Hugh Gimber, global market strategist at J.P. Morgan Asset Management. ‘ Investors are becoming more aware of the hazards’. The dollar index remained slightly below its overnight 20-year high of 106.57, with safe havens such as the Japanese yen in demand. The MSCI world equity index, which includes stocks from 50 nations, was up 0.1 percent. S& P 500 futures indicated a 0.3 percent increase on Wall Street. Earlier, the MSCI Asia-Pacific stock index outside Japan sank 1%, driven by a 2% loss in Taiwan’s benchmark index.
The pound traded at a two-year low versus the dollar as Prime Ministry Boris Johnson clung to power, stung by minister resignations and an increasing number of parliamentarians demanding his resignation. Sterling was trading at $1.1912 per dollar, down 0.1 percent from $1.1899 a day earlier, its lowest level since March 2020. Uncertainty over Europe’s gas supply has fueled the new wave of growth concerns, sending prices soaring. According to Reuters, benchmark Dutch gas prices have more than quadrupled since the middle of June.
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