US Treasury bond yields dropped on Monday as stock indexes struggled to get direction. There are intensified concerns that aggressive monetary policies from central banks around the world will increase the odds of a recession. The UK government has rescinded its tax cut plan and the Pound has managed to trade quite firmly in response.
The S&P index had just a little change but the Nasdaq 100 lost 0.3%. The ten-year Treasury bond yields lost five basis points. Stocks in Europe fell further on the back of escalating energy crisis.
Oil prices increased as rumor filtered in that OPEC+ might call to cut oil production. Shares of Credit Suisse Group dropped to their lowest over traders’ uncertainty about its future. An exchange-traded fund connected with Brazil rallied after news of the country’s presidential election going into a run-off.
The global financial market is expressing fears over the possible effects of the aggressive monetary policies most central banks are embarking on to curb the high inflation rates. Stocks in the US recorded their third consecutive quarter of decline since the Feds announced the new 75 basis point rate increase in September.
It is the longest streak of quarterly losses since 2009. The market now expects the US jobs report later in the week so it can measure the economy’s trajectory and the policy of the Federal Reserve.
A Look at Brazil
Shares of Credit Suisse and the British Pounds were the center of attention as markets opened in Europe. The Pound made some gains when expectations filtered in that the British government was going to pull back on its tax cut plans. The Pound eventually relinquished some of those gains after the announcement was made.
The Pound was still able to manage a 0.3% gain versus the US Dollar as it extends its rally into the fifth consecutive day. Investors equally waited on the sidelines to see how the market would react to the Brazilian presidential election. The first signs were seen in the Lyxor MSCI Brazilian exchange-traded fund in Paris as it rose to its highest since the 7th of July.
Credit Suisse shares dropped by 9% despite the assurance by the bank’s CEO, Ulrich Koerner, that its capital base is strong enough. There are, however, increasing speculations about its future as its need for more investment mounts.
The global fear over inflation gained new heights as oil prices rose over $82 per barrel as there are possibilities that OPEC+ might cut production. The organization will meet later in the week and it might reduce production by up to one million barrels per day.