Dollar opens above $3,801 amid inflation and new Fed monetary policies

The dollar opened at an average of $3,801.31, which represents an increase of $15.65 compared to the Representative Market Rate (TRM) of $3,785.66 for today’s session.

The opening price recorded by the Set-FX platform was $3,749, with a high of $3,750 and a low of $3,732.50. During the day, US$47.5 million was negotiated in 137 transactions.

Stocks rose and sovereign bonds stabilized on Monday as investors weighed the economic risks of inflation against expectations of tightening monetary policy. continuous growth.

US futures turned positive as the Stoxx 600 rose in Europe. Most Asian stocks tumbled and Chinese stocks fell as a virus outbreak fueled concerns about disruptions to business operations.

Global bonds stabilized after an earlier decline in which five-year Treasury yields surpassed 30-year bonds. Japan’s 10-year interest rate rose even after the country’s central bank announced two unlimited buying operations to keep yields below the allowable range.

Shares of leading US energy companies fell in premarket trade as oil slumped on concerns about demand in China, the world’s largest importer of crude oil. Stocks exposed to cryptocurrencies rose as Bitcoin turned positive for 2022. Gold has fallen.

A growing number of money managers are betting that stock indices are already largely pricing in bearish moves in bonds, while stock strategists from Goldman Sachs Group Inc. to JPMorgan Chase & Co. assure investors there is no need to worry about the U.S. Treasury. yield curve yet. .

Still, the war in Ukraine continues to disrupt the supply of key commodities and increase inflation risks that contribute to more aggressive Fed tightening expectations. Mobility restrictions in China could fuel concerns about rising costs.

“The risk of recession has increased significantly over the next two years as we now have a central bank that will have to stop the recovery to control inflation,” Kellie Wood, vice president of fixed income for Schroders Australia, told Bloomberg. “It’s very similar to 1994 when we consider that the US cash rate could go up to 2.5-3% in 12-18 months,” he said.

People familiar with the matter said that Tesla Inc. plans to suspend production at its Shanghai factory for at least one day. The electric vehicle maker rose in premarket trading after it said it plans to seek shareholder approval for a move that would allow for another share split.

Ukraine talks

In recent geopolitical developments, the Ukrainian and Russian negotiating teams will continue their in-person talks this week. President Joe Biden has tried to soften comments calling for the overthrow of Vladimir Putin, saying the United States is not seeking regime change in Moscow.

global stocks It has rebounded from lows caused by the Russian invasion, but doubts remain about the durability of the stock market’s rise.

Pepperstone Financial Pty research head Chris Weston wrote in a note that what we’re seeing may be “more of a bear market rally.” trimester can lead to “big and suspicious movements”.

As for oil, its price fell close to US$5 amid fears of lower fuel demand in China after the Shanghai financial center was shut to curb a surge in Covid-19 infections.

US WTI crude fell 6.25% to $106.80, while European Brent crude fell 5.72% to $110.72.

Shanghai began a two-stage quarantine of 26 million people on Monday in an effort to curb the spread of the coronavirus.

“This also raises concerns that China’s strict zero-COVID policy will lead to repeated shutdowns in major business centers,” Commerzbank analyst Carsten Fritsch wrote in a note. Said.

Oil demand from China, the world’s largest importer of crude oil, is expected to be 800,000 barrels per day lower than “normal” levels in April, said Bjarne Schieldrop, chief commodities analyst at SEB bank.

Source: Lare Publica

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