Wall Street prepares to open higher, and oil prices extend losses

LONDON (Reuters) – European stock indexes rose on Tuesday as risk appetite showed some signs of recovery again after Monday’s sharp declines, but concerns about economic growth still cast a shadow over markets, sending oil prices lower.

Asian stocks plunged to nearly two-year lows overnight, before paring losses. Read more

The decline in stock markets so far this month has been attributed to a combination of monetary tightening by major central banks and slowing economic growth.

Central banks in the United States, Britain and Australia last week raised interest rates and investors prepared for further tightening as policymakers battle high inflation.

Although these drivers continued on Tuesday, markets saw a slight recovery, which US stock futures suggested will continue until the Wall Street open.

At 1035 GMT, the MSCI World Stock Index (.MIWD00000PUS)Which measures stocks in 50 countries, is up 0.1% on the day, after touching its lowest levels since late 2020 earlier in the session.

Europe’s STOXX 600 Index is up 1.2% (.stoxx)However, the gains were still small compared to its 6.3% loss so far in May.

S&P 500 futures are up about 1% while Nasdaq futures are up 1.5%.

Peter McCallum, interest rate analyst at Mizuho, ​​said the bounce was a natural correction after the previous session’s decline. He said that traders may also prepare to take advantage of any boost in sentiment coming from Wednesday’s US Consumer Price Index (CPI) data.

“If headline inflation comes out and shows that CPI on a monthly basis is heading in the right direction, that makes the Fed case more pessimistic and increases are priced in,” McCallum said.

The dollar index was little changed, after hitting a 20-year high on Monday. Meanwhile, the Australian dollar fell to its lowest level in nearly two years overnight on fears of slowing economic growth, but recovered during European trading hours. Read more

China’s export growth slowed to its weakest in nearly two years, data showed, as the central bank pledged to ramp up support for the sluggish economy. Read more

Oil prices fell for a second day, weighed down by a combination of a stronger dollar, growing recession fears, and the COVID-19 shutdown in China. Read more

Given concerns that Russia could cut off the flow of gas to Europe, German officials are preparing an emergency package that could include taking control of important companies. Read more

France’s European Affairs Minister said European Union members may reach an agreement this week on the European Commission’s proposal to ban all oil imports from Russia. Read more

European government bond yields fell, with the German 10-year bond yield down 4 basis points at 1.054%, just below an almost 8-year high.

The yield on the 10-year US Treasury was 3.0223%, having fallen since reaching 3.203% on Monday – a level not seen since 2018.

Elsewhere, Bitcoin is up 4.4%, recovering some of its 11.6% drop on Monday, which was its biggest daily drop since May 2021. At around $31,403, the cryptocurrency has lost more than half of its value since hitting the all-time high. Its all-time high at $69,000 in November.

(Elizabeth Hawcroft reports). Editing by Bradley Perrett and Raisa Kasulowski

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