How Are Upcoming Rate Rises Impacting Shares?
Before anticipated euro zone inflation data, Fed, BOE, and RBA rate hikes later this week. As a result of Russia’s departure from a Ukrainian grain transit agreement, wheat and maize prices rose on Monday. After this, there was a decline in Europe’s major currencies and stocks.
A 0.6%–0.8% decline in the mining (SXPP) and oil and gas sectors, along with weaker-than-anticipated industrial data from China, contributed to a little decline in the regional STOXX 600 index. The Eurozone and the European Central Bank, which aims for a 2% price rise, will have more difficult readings when the October inflation figures hit a new high of 10.2% year on year.
Outlook on Euro Zone Market
While the euro surrendered to yet another surge in the strength of the U.S. dollar, euro zone bond yields surged higher in the news that Italy’s economy expanded far more strongly than forecast in the third quarter.
According to Kit Juckes, a strategist at Societe Generale (OTC: SCGLY), several central banks are meeting this week, and a lot of data will come. The most notable development so far is China’s weakening economy. The euro zone’s GDP and CPI will also become public. Australia’s actions tomorrow, those of the Fed on Wednesday, and those of the Bank of England on Thursday will be monitored, alluding to rate rise plans.
Wheat futures rose more than 8% following Russia’s weekend pullout from a pact allowing Ukrainian grain supplies to reach international buyers. Still, the gains later dropped to around 6% or $8.75 per bushel in Europe. In reaction to what it described as a significant drone attack by the Ukrainians on their fleet in the Crimean Peninsula that Russia has occupied, Moscow withdrew from the Black Sea agreement on Saturday. Kyiv said Russia was inventing a pretext for leaving the agreement, while Washington claimed it turned the food into a weapon.
Futures for palm oil grew by over 5%. The largest MSCI index of Asia-Pacific equities outside Japan increased overnight by 0.2%. Meanwhile, an unexpected drop in industrial statistics held down China’s stocks.
