Despite some improvement in sentiment, investors continue to worry about economic growth
Asian stock markets were mostly higher on Tuesday, rebounding along with US stock index futures after a holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan continued to edge up from a more than five-week low hit at the start of the week. Australia’s S&P/ASX 200 index climbed 1.41% even as RBA Governor Philip Lowe pointed in a speech to further rate hikes. Japan’s benchmark Nikkei 225 finished up 1.84%, while the Shanghai Composite index lost 0.26%, bucking the trend. Despite some improvement in sentiment, investors continue to worry about economic growth that could be derailed by central banks’ efforts to cool inflation.
In Europe, equities opened higher, with the Stoxx Europe 600 Index up 0.8% in early deals. Bank of England Chief Economist Pill reiterated earlier today that they will certainly be ready to act if they see evidence of persistent price pressures. Elsewhere, Germany’s BDI warned of an inevitable recession in Europe’s largest economy. The industry association slashed its economic forecast for 2022 to 1.5% from the 3.5% previous estimate.
Meanwhile, the USD index remains pressured by positive risk sentiment that dominates financial markets since the start of the week. The greenback is nearing the 104.00 mark, a break below which would pave the way to deeper losses in the near term. The next support should be expected at 103.80, followed by last week’s lows around 103.40. Still, еру US currency remains within a broader uptrend and would attract renewed safe-haven demand as soon as investors’ optimism wanes.
In other markets, bitcoin continues its recovery from late-2020 lows seen around $17,600 last week. The BTCUSD pair regained the $20,000 psychological level and was last seen the $21,200 zone, adding around 3% on the day. The largest digital currency could extend the rebound in the near term, but the overall picture remains bearish, suggesting the selling pressure will reemerge after a so-called dead cat bounce.