The safe-haven dollar rebounded, while the U.S. Treasury yield turn stayed deeply inverted, implying that investors remain alert to global recession risks.
COVID-19 outbreaks across China are reversing to yearnings for easing strict epidemic restrictions. One factor noted for a 10% drop in oil prices last week and Monday’s lackluster beginning in European stocks.
Beijing’s most populous district advised residents to stay home on Monday as the city’s coronavirus case numbers increased, while at least one district in Guangzhou was shut down for five days.
S&P 500 futures and Nasdaq futures fell 0.5 percent and 0.8 percent, respectively, as weak markets in Frankfurt and Paris weighed on major European shares.
MSCI’s broadest index of world shares dropped 0.5%.
The U.S. Thanksgiving holiday on Thursday and the distraction of the World Cup could push for soft trading, while Black Friday sales will present an insight into how consumers are managing.
A senior markets analyst at City Index in London, Fiona Cincotta, voiced a risk-off feeling kicking off the week.
The dollar was up 1.1% versus Japan’s yen at 141.94, having hit its highest after Nov. 11. The pound and the euro dropped by 0.7% and 0.8%, respectively, bounding off from last week’s 18-week highs.
China’s yuan reduced to a 10-day low versus the dollar on Monday of the worsening coronavirus infection numbers.
Priced for Recession
On Saturday, Atlanta Federal Reserve President Raphael Bostic said he was willing to step down to a half-point interest rate hike in December but emphasized that rates would probably stay high for longer than markets predicted.
Inflation had trended inferior after June, around 9.1%, increasing anticipations that a peak in Fed rates is near.