Markets Update – Yen Falls, Mining Stocks Rise, Wheat Rises, Corn & Soybeans Lower
RIYADH: Gains in banks, energy and mining stocks lifted Asian stocks slightly on Tuesday as investors braced for aggressive U.S. rate hikes and war disrupting oil supplies.
The yen broke through the psychological level of 120 against the dollar for the first time since 2016, and Treasuries extended losses after US Federal Reserve Chairman Jerome Powell announced more aggressive tightening on Monday. monetary policy than expected.
MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.2%, led by gains in Australia’s miners and banks index, which hit a two-month high.
Gold prices stable
Gold prices held steady on Tuesday as U.S. Treasury yields hit multi-year highs following aggressive inflationary policy by the Federal Reserve Chairman, amid escalating conflict between Russia and Ukraine backed bids for the safe haven metal.
Spot gold was flat at $1,936.82 an ounce at 03:47 GMT.
US gold futures rose 0.4% to $1,937.30.
Supply concerns: Wheat up, corn and soy at ease
Chicago wheat futures rose more than one percent on Tuesday. The market gained a second session as expectations of a protracted war between Russia and Ukraine heightened concerns over global supplies.
Corn and soybeans retreated, giving up some of the substantial gains from the last session.
The most active wheat contract at the Chicago Board of Trade added 1.5% to $11.36 a bushel, as of 0053 GMT, after climbing more than 5% on Monday.
Corn was down 0.3% at $7.54-1/4 a bushel, and soybeans were down 0.2% at $16.87-3/4 a bushel.
Russia exports more wheat via the Black Sea
Russia is exporting more wheat through its Black Sea ports as Sea of Azov routes remain restricted, analysts said on Monday, as domestic grain prices rose last week on weakening ruble.
“Exports are active. Weather permitting – it is currently unstable in the Black Sea due to strong winds – Russia will export more than 2 million tonnes of wheat in March,” said Dmitry Rylko, director of agricultural consultancy IKAR.
IKAR said prices for 12.5% protein wheat from Black Sea ports were $390 per ton free on board, although Rylko noted there were few new deals in recent days. .
The Fed will raise rates more aggressively
On Monday, Federal Reserve Chairman Jerome Powell delivered his strongest message yet on his battle against too-high inflation, saying the central bank needed to act “quickly” to raise rates and perhaps “ more aggressively” to prevent an upward price spiral from occurring. entrenched.
In remarks that prompted financial markets to recalibrate for a higher likelihood of the Fed raising interest rates by half a percentage point at one or more of its remaining meetings this year, Powell signaled an urgency to the central bank’s inflation challenge that was less visible than just a week ago, when the Fed made its first rate hike in three years.
“The labor market is very strong and inflation is way too high,” Powell told a National Association for Business Economics conference.
“Clearly there is a need to move quickly to bring the monetary policy stance back to a more neutral level and then move to more restrictive levels if necessary to restore price stability.”
(With contributions from Reuters)