Global markets regain some balance in rough seas

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In the currency markets, the dollar is continuing to slip towards a two-month low against a basket of currencies

London — Jittery global financial markets saw signs of stabilisation on Thursday, with major equity bourses and bond yields holding their ground and the dollar wilting after the highest US inflation reading in nearly 40 years.

Asian markets had weakened slightly as well on softer-than-expected Chinese lending data and more falls in the property sector, but futures markets pointed to a steady restart for Wall Street, which had closed higher on Wednesday. In a busy period for bond issuance as countries and companies look to beat the rise in rates, Italy was due to sell up to €7bn of three- and seven-year bonds later, Ireland was eyeing a bumper sale. The week was also set to be a record one for emerging market corporate debt with nearly 30 sales taking place.

The central bank of New Zealand has begun hiking rates too, and the New Zealand dollar rallied 0.4% to $0.6876, its strongest since late November. “The dollar does not have to increase because the Fed is readying a tightening cycle,” said Commonwealth Bank of Australia strategist Joe Capurso.

 

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