Equities pause after Wall Street extended rout - 27.9.2022

The Dollar strengthening has halted currently. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, gained 0.5% on Monday as Federal Reserve Bank of Cleveland president Loretta Mester said further rate hikes and restrictive policy will be needed for some time.

Both GBP/USD and EUR/USD continued retreating Monday. Both pairs are up currently. USD/JPY continueed its climbing yesterday while AUD/USD slowed its sliding with both the Australian dollar and the yen higher against the Greenback currently.

Futures on three main US stock indexes are up currently ahead of the reports by Conference Board and Census Bureau on consumer confidence and new home sales at 16:00 CET today with the yield on benchmark 10-year Treasury notes steady at 3.88%. The three main benchmark indexes ended lower on Monday recording daily losses ranging from 0.6% to 1.1% while Dow confirmed the blue chip index is in bear market now by closing down 20.5% from its record high close on January 4.

European stock indexes futures are rising currently after closing lower Monday as utility shares led losses. The British pound plunged to a record low early in the day yesterday, following Friday announcement by the new UK government on tax cuts for businesses, financial services reforms, £60 billion energy package to subsidize gas and electricity bills for households and businesses over the next six months and scrapping of bankers’ bonus caps. Asian indexes futures are mostly rising today with Chinese stocks reversing earlier gains spurred by the People’s Bank of China injecting about $24.7 billion of liquidity into the economy via repo market operations.

Brent is edging up currently on supply disruption concerns amid hurricane impact and possibility of more output cuts by Organization of Petroleum Exporting Countries and its allies led by Russia, known as OPEC+. Prices fell yesterday. US West Texas Intermediate WTI dropped 2.3% but is higher currently. Brent lost 2.4% to $84.06 a barrel on Monday.