Shares are recovering despite fears of growth and inflation

After TSE suspends all trading in Tokyo, Japan on October 1, 2020 due to system issues, blank prices will be displayed on the Tokyo Stock Exchange (TSE) Stock Quotes. REUTERS / Issei Kato / Files

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LONDON, May 17 (Reuters) – Global stocks rebounded on Tuesday on hopes of easing China’s repression in technology and Govt-19, but concerns about rising prices and slowing global growth set a tense tone elsewhere in the markets.

European stocks continued to make a positive start in Asia, with the STOXX index of 600 major European stocks. (.STOXX) With 1.7% and US stock futures, the S&P 500 e-minis suggests that Wall Street will follow suit.

Wide index of MSCI of Asia-Pacific equities outside Japan (.MIAPJ0000PUS) 2.5%, but so far this year the index is down 16.8%.

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“There was a good session in Asia, with the S&P 500 taking the lead, the US is likely to rise about 1% … but markets will remain firm on inflation and rate hikes,” said Philip Shaw, chief economist. At Investec in London.

“The headlines focus on the high inflationary pressures that arise directly from the Ukraine conflict, or the supply chain deficit emerging from locks in China to some extent,” he said.

There were signs of tension in bonds, currencies and commodities as fears of economic growth re-emerged in two of the world’s major economies following weak retail and industry figures and disappointing US production data in China. read more .

A code compiled by Bank of America City Criticism, which monitors whether economic data is coming in better or worse than economists expect, is once again in the negative.

Negative surprises

The New York Central Bank’s Empire State Manufacturing Index, released on Monday, showed a sharp decline in May and exports have plummeted since the onset of the epidemic. read more

Benchmark 10-year Treasury yields rose to 2.9185% from its Monday close of 2.879%, while two-year yields rose to 2.6195%, in line with traders’ expectations of higher Fed rates.

Investors will look at the number of central bank policymakers speaking on Tuesday for additional indications of the timing of rate hikes to combat inflation.

Jerome Powell, chairman of the US Federal Reserve, Christine Lagarde, chairman of the European Central Bank, and John Conliff, deputy governor of the Bank of England, are scheduled to speak at 1800 GMT.

Futures markets will raise 50 consecutive points in June and July, reaching 2.75% by the end of the year. However, there is growing expectation that other central banks will catch up.

Currency tremors

Markets of currency and commodities were tense as economic data fell amid gains from investors.

The Turkish lira fell 2%, the biggest drop since January, amid concerns over a global recession fuel pressure on the currency.

The US dollar, which tracks the greenback against a basket of currencies, fell 0.35% to 103.8, gaining further as investors bet on US rate hikes. read more

The European single currency was up 0.4% at $ 1.0475, losing 0.96% in a month.

Oil reached a seven-week high on Tuesday, driven by tightening supplies due to the EU’s drive to impose a ban on Russian oil imports, and investors focused on more demand from easing China’s govt locks. read more

Brent crude rose to $ 115.14, its highest level since March 28, while US West Texas Intermediate (WTI) crude rose 63 cents to $ 114.84.

The dollar’s recession supported the demand for greenback gold, and the price of gold remained stable as US Treasury yields came under pressure to recover. Spot gold traded up 0.2% at $ 1,827.44 an ounce.

Bitcoin was temporarily hovering at $ 30,295 after several days of sharp losses in the cryptocurrency markets following the fall in prices of several leading staple coins.

China Boost

Hopes that China could ease two key restrictions led to a positive mood in stocks early Tuesday.

Shanghai has reached the long-awaited three-day milestone without any new COVID-19 cases outside isolated zones, which could lead to the start of removing the city’s strict lockout. read more

Meanwhile, Chinese Deputy Prime Minister Liu He is scheduled to speak at a meeting with technology executives on Tuesday to promote the growth of the digital economy, sources familiar with the matter told Reuters. read more

The meeting is closely watched for clues as to how far Chinese authorities will ease a regulatory crackdown on the previously high-flying technology sector, from late 2020 onwards.

CSI300 Index of Mainland China (.CSI 300) Hong Kong’s Hong Cheng index rose 1.25% (.HSI) Technology companies listed in the city were up 3.27% (.HSTECH) Beijing’s repression of the sector rose by almost 6% in hopes of easing.

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Additional Report by Scott Murdoch in Hong Kong; Editing by Lincoln Feast, Kirsten Donovan and Barbara Lewis

Our standards: Thomson Reuters Trust Principles.

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