Tokyo –
Global markets rose modestly on Monday, but concerns over economic growth and inflationary pressures persisted.
France’s CAC 40 rose less than 0.1% to 7,522.58 in early trading. Germany’s DAX was 15,830.74, up 0.2%. The UK’s FTSE 100 rose 0.5% to 7,911.91. US stocks were set to rise as Dow futures rose less than 0.1% to reach 34,059.00. S&P 500 futures increased 0.1% to 4,168.75.
Traders are watching the upcoming earnings reports of companies and worrying about how inflation will affect interest rate movements by the Federal Reserve and other central banks around the world.
Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, said: “But the good news is that expectations have been raised by conversations with business executives who prefer to sound pessimistic. could be positive.”
Japan’s benchmark Nikkei 225 rose nearly 0.1% to close at 28,514.78. Australia’s S&P/ASX 200 rose 0.3% to 7,381.50 and South Korea’s Kospi rose 0.2% to 2,575.91. Hong Kong’s Hang Seng rose 1.7% to 20,782.45. The Shanghai Composite rose 1.4% to 3,385.61.
“The market is suffering more from heat than light, as the Fed’s hypersensitivity to policy forecasts to US data continues to infuse it with unusual volatility,” said Tan Boon Heng of Mizuho Bank.
China’s central bank has kept its one-year medium-term lending rate unchanged at 2.75%, suggesting that Tuesday’s economic growth data will not be too surprising.
“Investors remain concerned about subdued inflation, suggesting a slower recovery in demand post-reopening,” said Steven Innes, managing partner at SPI Asset Management. Sentiment remains weak due to the fact that volatility is still high.”
High interest rates slow the economy, increase the risk of recession, and keep inflation in check by lowering investment prices.
Last week, a senior Fed official said inflation was still too high and could require further tightening. Federal Reserve board member Christopher Waller said the highs would need to be sustained longer than the market expects, even after the rate hike is over.
After his comments, traders built bets that the Fed would raise rates at its next meeting in May, rather than halting rate hikes for the first time in over a year.
Friday’s report also showed that U.S. shoppers cut their spending at retail more than expected. Much of this is due to lower gas prices.
In energy trading, benchmark US crude fell 43 cents to $82.09 a barrel. International benchmark Brent crude fell 43 cents to $85.88 a barrel.
In currency trading, the US dollar rose from ¥133.75 to ¥133.91. The euro fell to $1.0978 from $1.0997.
