On the New York Stock Exchange the expectation of rapidly and sharply rising interest rates dominated on Friday, after recent statements by Federal Reserve Chairman Jerome Powell had held out the prospect of a more aggressive inflation defense, respectively larger interest rate steps. The Dow Jones Industrial fell before the weekend by almost -2.82% to 33,811.40 points and thus recorded a full minus of almost two percent for the week. The S&P 500 fell by -2.77% to 4,271.78 points and the technology exchange was down almost four percent. At the same time, the yield on ten-year U.S. government bonds remained at 2.86%, close to the highest level since the end of 2018 of almost three percent reached last week.
In Asia's equity markets, the prospect of fast-rising key interest rates in the US makes for a clearly negative start to the week. In Tokyo, the 225-stock Nikkei index loses around -2% and in Hong Kong, the Hang Seng index posts a daily loss of around -3%.
The new week is dominated by the ongoing corporate reporting season, US GDP data due on Thursday, European inflation figures due on Friday and the Bank of Japan's monetary policy meeting.
In the eurozone, private sector sentiment improved again somewhat in April. This was mainly due to a more optimistic assessment of service companies. The S&P Global purchasing managers' index improved by 0.9 points to 55.8, while analysts had expected a decline to 53.9 points.
In the UK, however, companies surveyed in April were more pessimistic. The Purchasing Managers' Index (PMI Composite) for the services and industrial sectors fell more sharply than expected from 60.9 to 57.6 points (consensus 58.7). Sentiment was dampened by the rise in the cost of living, the Ukraine conflict and rising interest rates, S&P Global Chief Economist Chris Williamson said.
Germany's Bundesbank believes that a comprehensive energy embargo against Russia would plunge the German economy into recession. Accordingly, real gross domestic product would decline by around two percent in the current year compared to the previous year, the central bank states in its current monthly report. But not only in the short term, but also in the following two years, a supply freeze would burden the German economy and lead to growth losses. In addition, higher inflation must be expected over a longer period due to rising energy prices, the Bundesbank commented.
|10:00||GE||Ifo Business Climate (April)||90.8|
|14:30||US||Chicago Fed National Activity Index (March)||+0.51|
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Source: LGT Bank (Switzerland) Ltd.
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