[Mercato USA]Yields soar, rising interest rates plummeting stocks down – dollar 142 yen low – Bloomberg

In the US financial market on the 22nd, US Treasury yields rose to the level for the first time in several years. Ten-year yields stood at around 3.7%, the highest since February 2011. The world’s leading central banks followed the US in one after another raising interest rates to fight inflation , even at the expense of economic growth.

On the foreign exchange market, the yen rose against the dollar. At one point, the price was in the low range of 140 yen, but later the increase was reduced.

Major equity indices continue to decline. The S&P 500 Index fell 0.8% to 3757.99, the lowest since June. The Dow Jones Industrial Average fell $ 107.10, or 0.4%, to $ 30,076.68. The Nasdaq Composite Index fell 1.4%. Shares rose after FedEx Corp said it expected cost savings of up to $ 2.7 billion.

The Fed said yesterday it expects another rate hike of 1.25 percentage points this year. Krishna Guha, Vice President of Evercore ISI, said, “This new trajectory of higher interest rates over a longer period is undeniably aggressive as it is associated with the possibility of a much higher probability of a hard landing. And it is. clearly negative for the resource risk. “

“The market may continue to be volatile,” said AJ Oden, senior investment strategist at BNY Mellon. “We expect the sentiment of risk reduction to continue until we begin to see signs that this tightening policy is having the effect described by the authorities.”

At 4:24 pm New York time, the 10-year Treasury yield increased 18 basis points to 3.71%. Gregory Faranello, head of US rate trading strategy at Ameribet Securities, said: “If the Fed’s terminal rate (the end point of rate hikes) moves from 4.5% to 5%, the yield of the 10-year treasury will be 3.75-4% must be acceptable, “he said.

In the foreign exchange market, the yen is strong across the board. The Dollar Index closed near the previous day’s close after a sharp move. Japanese Yen Buying / Dollar SellinginterventionThe foreign exchange market was severely shaken by the monetary policy decisions of each country and region. For the first time since 2015, the Swiss franc fell sharply against the euro. The Swiss National Bank (central bank) decided to raise interest rates by 0.75 percentage points on this day, but the franc was sold as the rate hike was below market expectations.

The Bloomberg Dollar Spot Index, which tracks movements in the dollar against the 10 major currencies, rose 0.1%. As of 4:24 pm New York time, the dollar fell 1.2% against the yen to 142.41 yen. In the morning there was also a scene where 140 yen and 36 sen were attacked. The euro fell less than 0.1% against the dollar to 1 euro = $ 0.9833.

Mark Sobel, former US Treasury Department official and US president of the think tank Forum of Official Monetary and Financial Institutions (OMFIF), said: “The intervention goes against the actions of the Federal Open Market Committee (FOMC). and the Bank of Japan. ” he says he. “So you should expect the impact to be short-lived,” he said.

Historical yen purchase intervention, short-term impact – map of global monetary policy unchanged

The New York crude oil futures market rebounded slightly. A wave of rate hikes from central banks around the world is another reminder that politicians will continue to fight inflation at the expense of economic growth. These interest rate hikes put pressure on the stock market, dampened the rise in crude oil prices and clouded the outlook for crude oil demand.

“The market is waiting for the next news to define the direction of the market,” said Robert Yawger, director of energy futures at Mizuho Securities USA. “We expect a significant piece of the puzzle to change dramatically to bring in purchases,” he said.

West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) for delivery in November rose 55 cents (0.7%) to close at $ 83.49 a barrel. November delivery of London ICE North Sea Brent increased 63 cents to $ 90.46.

New York gold futures rose slightly. Against the background of the intervention of the Japanese authorities on the foreign exchange market and the central banks of different countries and regions following the decision of the United States to further strengthen monetary policy, Japan and China were at odds.

The dollar fell after Japan’s intervention and then recovered losses. Meanwhile, US Treasury yields increased over the course of the day.

“Rising interest rates and the continued liquidation of exchange-traded funds (ETFs) are headwinds for a significant rise in gold,” said Tai Wong, senior trader at Heraeus Precious Petals.

“The money was stuck between Russian President Vladimir Putin and Fed President Jerome Powell,” said Ole Hansen, head of product strategy at Saxo Bank. It can be said that a new material has been added, “he said.” Unless there is some breeze from lower yields and a weaker dollar, we won’t see a quick resurgence of new longs. “

Gold futures for December delivery on the New York Mercantile Exchange (COMEX) closed at $ 1,681.10 an ounce, up 0.3% from the previous day. Spot prices fell 0.2% at 3:05 pm New York time.