Markets lower inflation expectations as copper slides through Reuters

By Carolyn Cohn and Tom Westbrook

LONDON / SINGAPORE (Reuters) – Global stocks and benchmark US securities rallied for the first week in a month on Friday as economic growth worries eased on the back of a slump and other commodity prices.

This week has been marked by steep declines in commodities due to concerns that the global economy is shaking and interest rate hikes will affect growth – which is pushing traders to lower inflation expectations and reduce the magnitude of the rises.

“Inflation will rise and exceed the target, but it will start to peak in the next few months,” said Andrew Hardy, investment manager at Momentum Global Investment Management.

“Markets can take it fairly – there is a potential for recovery later in the year.”

Copper, the pacemaker for economic production with a wide range of industrial and construction applications, is heading for its steep weekly fall from March 2020. It fell in London and Shanghai on Friday, falling more than 7% for the week.

Tin was down 9.7% at $ 24,380 per tonne, the lowest since March 2021 and the weekly percentage decline was nearly 22%, the largest on record.

Futures are down more than 3% at $ 109.70 a barrel and 10% per month, while benchmark grain prices are down and Chicago wheat is down more than 8% during the week. [O/R][GRA/]

Gold rose 0.29% to $ 1,828.50 an ounce, but continued to fall for a second week.

As energy and food have been the drivers of inflation, declines in stocks have provided some relief. After severe recent losses, MSCI’s global stock index rose 0.3% in a day and 2.4% this week, its first weekly gain since May.

The U.S. rose 0.7% after Wall Street key indices recorded solid gains on Thursday. [.N]

European stocks rose 0.82%, recording small weekly gains. 0.73%, showing a slight increase for the week.

“While market concerns about a sudden recession may be the culprit behind recent moves in commodity prices, lower commodity prices will remain the same as the doctor dictated to the global economy,” said Brian Dangerfield, a strategist on the Northwest market.

“Our tough landing fears are related to concerns that the price of many items could be reconnected.”

US Federal Reserve Chairman Jerome Powell told lawmakers on Thursday that the Federal Reserve’s commitment to curbing 40-year high inflation was “unconditional,” while acknowledging that harshly high interest rates could boost unemployment.

Economy Minister Robert Hebeck told the Der Spiegel newspaper that Germany was heading for a gas shortage if Russia’s gas supplies were low due to the conflict in Ukraine, and that some industries would be shut down if the winter was not enough. Friday.

German business sentiment is lower than expected in June.

Bonds rallied strongly in the hope that betting on aggression rate hikes would be reduced, with German two-year yields falling 26 basis points on Thursday, the biggest drop since 2008.

Germany’s 10-year yield fell 4 pps on Friday after falling 29 pps on Thursday, heading towards its first weekly fall since mid-May. [GVD/EUR]

The benchmark was 3.0666% after falling 7 pps on Thursday [US/]

Bond funds suffered the biggest outflow in the week from April 2020 to Wednesday, while stocks lost $ 16.8 billion as markets plunged into maximum rough mode, BofA’s weekly flow analysis showed on Friday.

The US dollar fell to a 20-year low last week. It was flat at $ 1.0529 against the euro and was down 0.2% at 134.67 yen. [FRX/]

The yen has been stable this week and gained little support on Friday from Japanese inflation, topping the Bank of Japan’s 2% target for the second month in a row, putting more pressure on its ultra-easing policy position.

Outside Japan, the broader index of MSCI’s Asia-Pacific shares rose 1.1%, helping short-term sellers to bail out. Ali Baba (NYSE 🙂 – This is up almost 6% – amid indications that China’s technological repression is declining.

1.2% to 2% weekly gain.