Stocks and currencies seesawed on Wednesday after a rocket that struck inside the Polish border fueled fears of an escalation of the war in Ukraine.
(Bloomberg) — Stocks and currencies seesawed on Wednesday after a rocket that struck inside the Polish border fueled fears of an escalation of the war in Ukraine.
European equity futures fell, as did shares in Japan, Hong Kong and Australia, amid significant volatility in intraday prices. US futures pared early declines to trade slightly higher.
The euro gained, reversing earlier losses, after US President Joe Biden said the missile was unlikely to have been fired by Russia. The yen weakened as haven demand waned.
The Associated Press cited unnamed US officials as saying initial findings pointed to the projectile being fired by Ukrainian forces at an incoming Russian one.
The Polish zloty trimmed its losses against the dollar while a gauge of the greenback traded within a broad range through the day, underscoring investor uncertainty.
Treasury yields saw gains after recent declines that were made in line with pricing for a slower pace of interest hikes from the Federal Reserve. Oil and gold both slipped.
The cautious trading Wednesday contrasted with more upbeat sentiment on Tuesday when US shares rallied after producer price index data fell short of forecasts, easing inflation concerns.
“After a strong rebound in US equities and in the Chinese equity markets, I think it makes sense to have some consolidation,” Grace Tam, chief investment adviser for Hong Kong at BNP Paribas Wealth Management, said on Bloomberg Television. “With what happened in terms of the missile, it could be the trigger of the consolidation. Sentiment has gone from risk-on to a little bit risk-off.”
Key events this week:
- US business inventories, cross-border investment, retail sales, industrial production, Wednesday
- Fed’s John Williams, Lael Brainard and SEC Chair Gary Gensler speak, Wednesday
- ECB President Christine Lagarde speaks, Wednesday
- Eurozone CPI, Thursday
- US housing starts, initial jobless claims, Thursday
- Fed’s Neel Kashkari, Loretta Mester speak, Thursday
- US Conference Board leading index, existing home sales, Friday
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 0.1% as of 6:46 a.m. London time. The S&P 500 gained 0.9%
- Nasdaq 100 futures rose 0.1%. The Nasdaq 100 rose 1.5%
- The Topix Index was little changed
- The Hang Seng Index fell 1.1%
- Australia’s S&P/ASX 200 fell 0.3%
- The Shanghai Composite Index fell 0.5%
- Euro Stoxx 50 futures fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index rose less than 0.1%
- The euro rose 0.3% to $1.0379
- The Japanese yen fell 0.4% to 139.80 per dollar
- The offshore yuan fell 0.5% to 7.0818 per dollar
Cryptocurrencies
- Bitcoin fell 0.3% to $16,845.68
- Ether was little changed at $1,245.33
Bonds
- The yield on 10-year Treasuries advanced five basis points to 3.82%
- Australia’s 10-year yield declined three basis points to 3.73%
Commodities
- West Texas Intermediate crude fell 0.8% to $86.21 a barrel
- Spot gold fell 0.4% to $1,772.49 an ounce
This story was produced with the assistance of Bloomberg Automation.
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