© Reuters. File photo: Passersby glimpse at an electric stock quotation board outside a brokerage in Tokyo, Japan, April 18, 2023. Reuters/Issei Kato/file photo
By Koh Gui King and Mark Jones
NEW YORK/LONDON (Reuters) – Global shares halted a five-day rally on Thursday, giving investors a sigh of relief, while oil prices fell as low as $3 a barrel on signs of oversupply in the U.S. and weak Chinese demand. .
By 1519 GMT (10:19 a.m. EST), MSCI’s gauge of shares around the world was down 0.14%, and stocks on Wall Street were little changed.
Down 0.08%, up 0.09% and barely changed.
Wall Street’s mood wasn’t helped by declines in shares of Cisco Systems (NASDAQ:) and Walmart (NYSE:) following lower demand forecasts. [.N]
Some analysts believe that despite recent sharp gains, equity markets are unlikely to fall sharply for the time being, as investors celebrate the possibility that US interest rates could peak.
“Upside risks to inflation and downside risks to growth mean that the risk-positive data flow is unlikely to last until 2024, but it is not clear that there will be a downside before the end of the year to refute the pleasant, if possibly volatile, narrative.” There will be enough data for this,” Citi analysts said.
That said, oil prices fell nearly $3, slipping 3.93% to $73.65 a barrel, and were down 3.71% on the day at $78.17.
Oil prices are falling partly as the US Energy Information Administration (EIA) said US crude oil stockpiles rose by 3.6 million barrels last week to 421.9 million barrels, more than analysts polled in a Reuters poll had expected. [EIA/S][O/R]
In Europe, the pan-European index fell 0.46% from a one-month high.
The U.S. dollar fell after data showed the number of Americans filing new claims for unemployment benefits hit a three-month high last week, pointing to a slowing labor market that could bolster the Federal Reserve in the fight against inflation. Can help.
The euro declined 0.2% to $1.0885 as the dollar weakened. [USD/]
Gold prices also benefited from the dollar’s weakness, jumping 1.2% to $1,983.6900 an ounce. [GOL/]
Signs of softening in the US labor market weighed on Treasury yields. [US/] Benchmark 10-year notes fell 9.2 basis points to 4.445%, from 4.537% on Wednesday.
Last time it fell 8.5 basis points to 4.8312% from 4.916%.
“If you don’t get confirmation of a slower economic direction from every piece of data every day then we risk getting out of momentum on big trades,” said Societe Generale (OTC:) FX strategist Kit Jucks. “Until we get to the point where there’s going to be a rate cut, everything is going to be very stop-and-go. The dollar selloff is stop-start, the bond market rally is really stop-start and Equity markets are everywhere.”
German yields fell to a near two-month low of 2.567%, while sterling fell to a six-month low against the euro as dealers in London moved closer to their predictions about when the Bank of England (BoE) would cut rates. will start. [EUR/GVD][GBP/]
Many now think that could happen by May, although BOE policymaker Meg Green warned on Thursday that investors were not missing the message that the central bank has been emphasizing recently that interest rates will remain low for the long term. Will remain high for some time.
“I think markets globally haven’t really taken notice of this,” Green told Bloomberg Television. He said that BOE is not talking about cutting rates.
Asian shares fell overnight as new data from China showed continued weakness in the troubled property sector, dealing a blow to recent optimism about a recovery in the world’s second-largest economy.
While data this week showed China’s industrial and retail sectors are now bouncing back, the data also showed a sharp decline in property investment and weak house prices, underscoring the sector’s ongoing decline.
There was also mixed news from Japan, where exports grew for the second consecutive month in October, but at a much slower pace due to a decline in chips and steel shipments from China.
“The weak economic data from both countries points to the fact that the global economy is slowing, highlighting the broader headwinds facing businesses,” said Tina Teng, market analyst at CMC Markets (LON:).
Chinese shares showed some disappointment ahead of the first meeting in years between US President Joe Biden and Chinese President Xi Jinping, with Shanghai’s blue-chip CSI300 index down 1% and Hong Kong’s down 1.3%. [.SS]
While the two leaders agreed to resume military-to-military communications and cooperate on anti-drug policies, a sign that relations are improving, some investors were disappointed by the lack of other breakthroughs.
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