1 week ago
World Shares Slip as Bond Pressure and Iran Tensions Persist
Stock markets around the world mostly fell on Monday.
Investors were worried because government borrowing costs remained high.
Higher bond yields can make loans more expensive and may slow the economy.
They were also concerned about the conflict involving Iran and the effect on oil shipments.
Iran’s currency reached a record low on informal markets.
The United States is preparing new sanctions against Iran.
Investors are waiting for a US inflation report on Wednesday.
They will also watch a speech by Federal Reserve Governor Kevin Warsh at a meeting in Jackson Hole.
Some markets rose, including Australia’s main stock index, while others fell sharply.
World shares were mostly lower Monday as high bond yields and Iran-related uncertainty unsettled markets.
Iran’s rial fell to a record informal-market low of 2.02 million per US dollar, versus an official rate of about 1.5 million.
The US 10-year Treasury yield reached 4.73 per cent Friday before easing to 4.71 per cent early Monday.
Investors are awaiting Wednesday’s July US personal consumption expenditures inflation report and a speech by Federal Reserve Governor Kevin Warsh.
Brent crude fell 1.1 per cent to USD 93.32, while US benchmark crude declined 1.8 per cent to USD 85.52 per barrel.
- Who
- Global investors, the United States government, Iranian officials, the Federal Reserve and oil-market participants are involved.
- What
- World shares mostly declined amid persistent bond-market pressure, Iran-related uncertainty, inflation concerns and falling oil prices.
- Where
- The market moves affected Europe, Asia and US futures; US economic officials will meet in Jackson Hole, Wyoming.
- When
- The market moves occurred Monday; the US PCE inflation report is due Wednesday, and the Jackson Hole meeting takes place later in the week.
- Why
- Investors were responding to elevated Treasury yields, stubborn inflation, government borrowing concerns, possible new US sanctions on Iran and uncertainty over oil shipments through the Persian Gulf.
Iranian Security Warning
Diplomatic Position
Response to possible new US measures
Iranian Security Warning
The head of Iran’s top security body said Tehran would regard any country’s support for new US economic measures against Iran as an act of war.
Diplomatic Position
Iran’s president defended a memorandum of understanding with the United States as the best way out of the stalled conflict.
Key facts
- Iranian rial
- The informal-market rate fell to 2.02 million rial per US dollar, while the official Central Bank rate was about 1.5 million rial.
- US 10-year Treasury yield
- The yield rose to 4.73 per cent Friday, its highest point in more than a year, and stood at 4.71 per cent early Monday.
- 30-year Treasury yield
- The yield was near its highest level since 2007.
- US inflation report
- The July personal consumption expenditures report, the Federal Reserve’s preferred inflation measure, is scheduled for Wednesday.
- Regional markets
- South Korea’s Kospi fell 3.1 per cent, Hong Kong’s Hang Seng declined 1.9 per cent and Australia’s S&P/ASX 200 gained 0.5 per cent.
- Oil prices
- Brent crude fell 1.1 per cent to USD 93.32 per barrel, while US benchmark crude dropped 1.8 per cent to USD 85.52.
- Jackson Hole speech
- Federal Reserve Governor Kevin Warsh is expected to provide signals about interest rates and other policies later in the week.
Sources
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