- Tuesday's decline in US share futures coincided with a rise in the currency and sovereign bond prices, highlighting the general worry about the future of the economy amid high inflation and China's troubles with COVID.
- After a Monday dip on Wall Street, the S&P 500 and Nasdaq 100 both lost roughly 0.5 percent as investors prepare for the second-quarter earnings season, which might reveal how businesses are handling inflation and recession worries. One of the first significant market participants to report, Pepsi increased in premarket trading after raising its revenue projection. Although it anticipated challenges from the strong dollar, the soft drink manufacturer said demand remained solid despite inflation.
- The yen gained, highlighting investor concern, as the dollar moved toward levels last seen at the height of the 2020 market panic over covid. While this was happening, the energy crisis in the region and severe recession fears caused the shared currency of the euro-area to come dangerously close to parity with the dollar.
- The US 10-year yield increased, reaching 2.92% as treasuries continued to rise. Europe saw a bond rally as well. After statistics revealed that investor confidence had fallen to its lowest level since 2011, german bonds jumped, driving the benchmark 10-year yield to its lowest level since May.
- Nomura expects ECB to hike rates by 175 bps by March 2023, then expects a 25 bps rate cut in June 2023 as the potential recession drags on.
- Nomura expects Fed to start rate cuts in September 2023 after reaching the terminal rate of 3.50-3.75% in February 2023.
- EU Energy Chief Simson: Summer energy cuts can avoid winter shortages.
- IEA Executive Director Birol hopes G7 plan to impose price caps on Russian oil gets buy-in from several countries.
