Stocks, currencies on edge after Poland blast: Markets Wrap

(Bloomberg) — Stocks and currencies tumbled Wednesday after a missile slammed inside the Polish border, fueling fears of an escalation of war in Ukraine.

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European stock futures fell, as did stocks in Japan, Hong Kong and Australia, amid significant volatility in intraday prices. US futures parried early declines to trade slightly higher.

The euro gained, reversing previous losses after US President Joe Biden said the missile was unlikely to have been fired by Russia. The yen weakened as demand for ports declined.

The Associated Press quoted unnamed US officials as saying initial findings indicated the projectile was fired by Ukrainian forces at an oncoming Russian projectile.

The Polish zloty offset its losses against the dollar, while a gauge of the greenback traded in a broad range throughout the day, highlighting investor uncertainty.

Treasury bond yields rose after recent declines made in line with pricing for a slower rate hike by the Federal Reserve. Oil and gold both slipped.

Cautious trading Wednesday contrasted with more upbeat sentiment on Tuesday, as US stocks rallied after producer price index data fell short of forecasts, allaying inflation concerns.

“After a strong rebound in US equities and Chinese equity markets, I think it makes sense to do some consolidation,” Grace Tam, chief investment advisor for Hong Kong at BNP Paribas Wealth Management, told Bloomberg Television. “With what happened in terms of the missile, this could be the trigger for the consolidation. Sentiment has changed from risk-on to a little bit of risk-off.”

Main events this week:

  • US business inventories, cross-border investments, retail sales, industrial production, Wednesday

  • Fed’s John Williams, Lael Brainard and SEC Chairman Gary Gensler speak Wednesday

  • ECB President Christine Lagarde speaks on Wednesday

  • Eurozone CPI, Thursday

  • US housing starts, first jobless claims, Thursday

  • Fed’s Neel Kashkari, Loretta Mester speaking, Thursday

  • US Conference Board Leading Index, Existing Home Sales, Friday

Some of the major moves in markets:

Shares

  • Futures on the S&P 500 were up 0.1% as of 6:46am London time. The S&P 500 gained 0.9%

  • Nasdaq 100 futures rose 0.1%. The Nasdaq 100 rose 1.5%

  • Little has changed in the Topix Index

  • The Hang Seng Index fell 1.1%

  • Australian S&P/ASX 200 down 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

Raw materials

  • 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 created with the help of Bloomberg Automation.

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