Global stocks will face weekly losses even if they recover

LONDON, April 8 (Reuters) – European stocks rose again on Friday, but global stocks were on track for the first week in a row as aggressive global rate hikes and geopolitical risks plagued investors.

Global risk appetite fell during the week as policymakers within minutes of the Federal Reserve and the European Central Bank began to increase their efforts to control inflation.

At 0811 GMT, the MSCI Global Equity Index (.MIWD00000PUS)Shares in 50 countries traded up 0.2%, but fell 1.3% for the week and are on track for its first weekly loss in four countries.

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Pan-European STOXX 600 (.STOXX) Markets in Europe were up 1.3% on Thursday with moderate bounce off Wall Street.

Eddie Cheng, head of international multi-asset portfolio management at Allspring Global Investments, said Friday morning that the rise in European stocks was “probably a small recovery” from the week’s downward trend, but investors are still optimistic. Fed raising rates and the war in Ukraine.

“Uncertainty has not diminished, it is really increasing,” he said, noting the new sanctions on Russia. The European Commission on Tuesday proposed new sanctions on Russia, including a ban on Russian coal purchases. read more

The risk of the French presidential election was evident in the securities markets, as the cost of borrowing from the French increased, compared with the general decline in the yields of major European government bonds.

Investors are worried about the risks of defeating far-right candidate Marine Le Pen from current President Emmanuel Macron.

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“Markets will welcome Macron’s success because markets will reduce political uncertainty and maintain business-friendly management,” said Lale Agoner, senior market strategist at BNY Mellon Investment Management.

A Le Pen victory, though not yet possible, is on the verge of error before Sunday’s first round of voting, polls show. read more

The spread between the French and German 10-year yields was close to its widest level at 54.5 basis points since April 2020.

In U.S. bond markets, long-term treasuries carry the burden of this week’s sell-off as traders are hit hard by the central bank’s lowering of its bond stocks over the long term.

The benchmark 10-year yield is up almost 27 bps this week to 2.6584%, but remained stable in early European trading.

The US dollar has been the primary beneficiary of rising US yields and the dollar index has risen for the seventh consecutive day and is on track for its best week in five.

The strong dollar has again put pressure on the euro and the struggling yen. The Japanese currency was nearing its lowest level in years and battled with 124.00, while the euro fell to its lowest level since March 7 at $ 1.0848.

Brent crude previously rose after falling below $ 100 a barrel. US crude oil futures rose 0.8% to $ 96.76 a barrel.

Gold traded slightly higher at $ 1,931, setting a weekly gain of 0.3%.

Major cryptocurrencies recorded small gains with the Bitcoin trade at $ 43,813, however it is still on track for a second week of decline.

Global stocks

Report by Samuel Indyk and Elizabeth Howcraft; Editing by Nick McPhee

Our standards: Thomson Reuters Trust Principles.

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