August 17, 2022

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Global stocks rise, gold falls after Russia avoids default

Global stocks rise, gold falls after Russia avoids default

  • Wall Street’s main indexes closed higher
  • Gold prices go down
  • Oil above $100 a barrel
  • Treasury yield curve is flattened
  • The US dollar is falling

NEW YORK (Reuters) – Global stock markets rose on Friday after traders rejoiced in a payment of Russian bonds that avoided a historic sovereign default, while gold prices fell as demand for the safe-haven metal eased following the start of the US interest rate. Hiking course.

The Russian Finance Ministry announced, Thursday, that it has sent funds to cover $117 million in coupon payments on sovereign dollar-denominated bonds that were due this week. Read more

The payments calmed investor fears that a Russian default, which would have been the first in a century, could upset already nervous markets. Western sanctions have hampered Russia’s financial transactions since it invaded Ukraine on February 24.

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“If you think about where we would be if Western governments had refused to use frozen funds for coupon payments on Russian sovereign bonds, we would be in default in the International Economy”. group in Virginia.

“As a result, some of the biggest impacts on the global financial system are being deferred into the future – and that’s fine.”

The MSCI Global Stocks Barometer, which tracks stocks in 50 countries around the world (.MIWD00000PUS) It rose 0.89%, while the broadest index of MSCI Asia Pacific shares outside Japan (MIAPJ0000PUS.) It had closed 0.25% higher overnight.

European stocks closed higher as peace talks to end the Russian-Ukrainian conflict continued amid heavy fighting. Read more

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Pan-European STOXX 600 Index (.stoxx) It rose 0.91%.

Wall Street’s three major indices closed higher, boosted by recently battered tech stocks, after talks between US President Joe Biden and Chinese President Xi Jinping over the Ukraine crisis ended without major surprises. Read more

Dow Jones Industrial Average (.DJI) The S&P 500 rose 0.8% to 3,4754.93 (.SPX) It rose 1.17% to 4463.12 and the Nasdaq Composite Index (nineteenth) He added 2.05% to 13,893.84.

“We are in the midst of a comfortable recovery after such a massive tech sell-off ahead of the potential rate path by the Federal Reserve. Now that they have removed all price uncertainty, tech stocks can re-price,” Cox added.

The US dollar index bounced back from recent declines as Federal Reserve officials said the central bank may need to be more aggressive to deal with inflation, while the dollar hit a six-year high against the yen. Read more

The dollar index rose 0.269%, with the euro slipping 0.38% to $1.1047.

Gold prices were on track for their biggest weekly drop in nearly four months, following the Fed’s rate hike and the US dollar’s recovery.

Spot gold fell 1.2% to $1919.36 an ounce, while US gold futures fell 0.33% to $1928.20 an ounce.

Long-term US Treasury yields fell early due to the lack of resolution to the Russian-Ukrainian dispute, while short-term yields increased, further stabilizing the curve.

The benchmark 10-year yield fell to 2.1548% from 2.167% and the 30-year yield was at 2.4225% from 2.461% Thursday, in a sign of risk aversion.

Two-year Treasury yields, which closely mirror Fed rate expectations, rose slightly, instead, at 1.9465% from 1.915%.

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Oil prices stabilized higher, but posted a second consecutive weekly loss, after a volatile trading week with Russian barrels not easy to replace in a tight market. Read more

Brent crude futures closed 1.2% higher at $107.93 a barrel, a day after rising nearly 9% in the biggest daily percentage gain since mid-2020. US West Texas Intermediate crude futures closed 1.7% higher at $104.70 a barrel.

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(Shibuike Ujh Report) From New York. Editing by Edmund Blair and Jonathan Otis

Our criteria: Thomson Reuters Trust Principles.