# Global equities waver on inflation view as falling oil supplies lift prices
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-04-13
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Global shares rise amid inflation woes and supply fears
Meta Description: Investor optimism boosts global shares despite uncertain inflation forecasts and supply worries post Russia's invasion of Ukraine, pushing up oil prices.
URL: https://financedigest.com/global-equities-waver-on-inflation-view-as-falling-oil-supplies-lift-priceshtml

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By Katanga Johnson

WASHINGTON (Reuters) -Global shares traded up on Wednesday after a six-day slump amid investor optimism despite blurry inflation forecasts, while supply concerns following Russia’s invasion of Ukraine helped push oil prices higher.

The Japanese yen weakened past the 126 yen per dollar mark on Wednesday for the first time since 2002, while the euro was pinned at a one-month low as investors bought the U.S. currency after [hawkish comments](https://www.financedigest.com/hawkish-ecb-comments-push-up-rate-hike-expectations.html "Hawkish ECB comments push up rate-hike expectations") by Federal Reserve officials.

The prospect of fast and aggressive U.S. interest rate [hikes and growing market expectations that the Bank of Japan](https://www.financedigest.com/sp-warns-of-possible-economic-blow-hit-to-japan-inc-from-boj-rate-hike.html "S&P warns of possible economic blow, hit to Japan Inc from BOJ rate hike") will keep rates ultra-low in the near term have fuelled the Japanese currency’s declines against the dollar.

Meanwhile, U.S. Treasury yields fell and after [data on inflation](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") did not dissuade investors from believing that inflation may have peaked.

The pan-European STOXX 600 index lost 0.21% and MSCI’s gauge of [stocks across the globe gained](https://www.financedigest.com/oil-gains-as-russian-supply-cuts-temper-concerns-over-rate-hikes-high-stocks.html "Oil gains as Russian supply cuts temper concerns over rate hikes, high stocks") 0.29%.

Equity markets have suffered from hawkish moves from the [world’s top](https://www.financedigest.com/top-10-fastest-bikes-in-the-world.html "Top 10 fastest bikes in the world") central banks in response to inflation, analysts said.

[Data on Wednesday showed no let-up for Britain](https://www.financedigest.com/britain-plans-new-data-rules-to-ease-compliance-burden.html "Britain plans new data rules to ease compliance burden") after inflation hit a 30-year high of 7%, although this came a day after a lower-than-expected U.S. [print had given some traders cause to hope policy](https://www.financedigest.com/travel-insurance-small-print-what-you-need-to-know-loopholes-in-policies-that-could-cost-you-a-packet.html "Travel insurance small print – what you need to know Loopholes in policies that could cost you a packet") would be tightened more slowly.

Another month, another jump in [inflation figures](https://www.financedigest.com/french-inflation-revised-upwards-in-february-to-7-3-final-figures.html "French inflation revised upwards in February to 7.3% – final figures") around the world,” said Oliver Blackbourn, portfolio manager at asset manager Janus Henderson.

The [increase in prices](https://www.financedigest.com/syngenta-4q-profit-falls-as-raw-material-prices-increase.html "Syngenta 4Q profit falls as raw material prices increase") further ratchets up the pressure on the Bank of England to respond to dampen the squeeze on real incomes. However, fading [growth forecasts](https://www.financedigest.com/gsk-spinoff-haleon-forecasts-2023-organic-revenue-growth-at-top-end-of-view.html "GSK-spinoff Haleon forecasts 2023 organic revenue growth at top-end of view") show the danger to the economy from tightening too quickly or too far.

On [Wall Street](https://www.financedigest.com/asian-stocks-edge-up-before-u-s-jobs-data-defying-wall-street-selloff.html "Asian stocks edge up before U.S. jobs data, defying Wall Street selloff"), the Dow Jones Industrial Average rose 0.22%, the S&P 500 gained 0.33% and the Nasdaq Composite added 0.93%.

Investors, poised for lackluster [earning results](https://www.financedigest.com/astrazeneca-lifts-2022-earnings-outlook-as-cancer-drugs-boost-results.html "AstraZeneca lifts 2022 earnings outlook as cancer drugs boost results") from the largest U.S. banks, have been eyeing investment banking revenue, which has stalled after the [Russian invasion of Ukraine](https://www.financedigest.com/eastern-ukraine-town-empties-as-residents-fear-new-russian-assault.html "Eastern Ukraine town empties as residents fear new Russian assault") in late February. In the first quarter, the total value of pending and completed deals fell to its lowest since the [second quarter](https://www.financedigest.com/dollar-pares-gains-as-us-growth-contracts-for-second-quarter.html "Dollar pares gains as US growth contracts for second quarter") of 2020, according to Refinitiv data.

Overnight in Asia, much weaker-than-expected import data from [China weighed on the outlook](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook"), but added to views that Beijing could ease policy further, helping MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.73% higher.

Japan also [posted weak](https://www.financedigest.com/japans-factory-output-posts-biggest-fall-in-8-months-on-weak-autos-chips-sectors.html "Japan’s factory output posts biggest fall in 8 months on weak autos, chips sectors") machinery orders data, although its stocks closed higher on the U.S. inflation data that had shown consumer prices rose by the most in 16-1/2 years in March as war in Ukraine [boosted the cost of gasoline to record](https://www.financedigest.com/recruiter-hays-boosted-by-record-net-fees-but-cautious-on-outlook.html "Recruiter Hays boosted by record net fees, but cautious on outlook") highs, although underlying inflation pressures moderated.

OIL, GOLD FIRMER

After the prior day’s fall, the yield on 10-year Treasury notes rose on Wednesday and was last down 5.3 basis points to 2.674%, compared to an over three-year peak of 2.836%, before the [inflation data](https://www.financedigest.com/shares-steady-dollar-gains-ahead-of-u-s-inflation-data.html "Shares steady, dollar gains ahead of U.S. inflation data").

The two-year U.S. [Treasury yield](https://www.financedigest.com/stocks-fall-treasury-yields-rise-upon-final-2022-trading-day.html "Stocks fall, Treasury yields rise upon final 2022 trading day"), which typically moves in step with interest rate expectations, was down 7 basis points at 2.319%.

The most important issue this year is how the Federal Reserve is going to respond to the rising levels of inflation,” said Chris Zaccarelli, chief [investment officer at Independent Advisor](https://www.financedigest.com/5-tips-choosing-right-investment-advisor.html "5 tips for choosing the right investment advisor") Alliance in Charlotte, North Carolina.

Short-term interest rate [expectations](https://www.financedigest.com/ecbs-makhlouf-expects-50-bps-rate-hike-in-december.html "ECB’s Makhlouf expects 50 bps rate hike in December") have jumped and long-term interest rates have moved higher.

In the [euro zone](https://www.financedigest.com/euro-zone-inflation-eases-in-feb-but-core-prices-pick-up.html "Euro zone inflation eases in Feb but core prices pick up"), meanwhile, a key gauge of long-term inflation briefly breached 2.4% on Wednesday, above the European Central Bank’s 2% target ahead of its next meeting on Thursday.

In response, [bond yields](https://www.financedigest.com/global-equities-gain-as-rising-bond-yields-pressure-gold.html "Global equities gain, as rising bond yields pressure gold") in the bloc climbed, with Germany’s 10-year yield at 0.810%.

[Oil prices](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop") rose after Russian President Vladimir Putin said that on-and-off peace talks with Ukraine had hit a dead end, fuelling supply worries, with U.S. crude up 2.13% to $102.74 per barrel.

Brent was at $107.16, up 2.41% on the day.

Gold bounced off its lows to add 0.6% to $1,977.85 an ounce.

In currency markets, the euro was last up 0.26% to $1.0854. The U.S. dollar soared to a nearly 20-year high against a sluggish yen on Wednesday, as aggressive tightening from the Federal Reserve contrasted sharply with the [Bank of Japan’s ultra-loose monetary policy](https://www.financedigest.com/what-to-make-of-the-headlines-brexit-and-bank-of-england-policy-eba-bank-stress-tests.html "What to make of the headlines? Brexit and Bank of England policy, EBA bank stress tests").

The greenback rose as high as 126.32 yen, its strongest [level since June](https://www.financedigest.com/ukraine-war-energy-crisis-send-german-business-sentiment-to-lowest-level-since-june-2020.html "Ukraine war, energy crisis send German business sentiment to lowest level since June 2020") 2002\. However, it last traded down 0.179%.\[FRX\]

The New Zealand [dollar was down 1.1% after the Reserve Bank of New Zealand raised interest rates](https://www.financedigest.com/shares-steady-dollar-dips-as-us-holiday-lifts-rates-gloom.html "Shares steady, dollar dips as US holiday lifts rates gloom") by 50 basis points — its most aggressive hike in over two decades — but tempered its rate outlook.

The Bank of Canada meets later on Wednesday and is also [expected to deliver a sharp hike](https://www.financedigest.com/dollar-set-for-weekly-loss-amid-expectations-fed-will-slow-hikes.html "Dollar set for weekly loss amid expectations Fed will slow hikes").

(Additional reporting by Simon Jessop and Alun John in LondonEditing by Kim Coghill, Alexander Smith and Chizu Nomiyama)


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