Economic pressure pushes US futures and European bonds lower

Contracts in the S&P 500 and Nasdaq 100 fell at least 0.5% each following the major indexes posted their eleventh decline in 13 weeks.

While European stocks opened higher amid investors’ interest in buying on the decline, with the dollar swinging between gains and losses with the American Independence Day holiday, while Italian bonds fell as investors awaited political tensions.

According to Bloomberg Agency, global stocks and bonds are in the grip of the worst selling in at least 3 decades, as the increasing chances of a US or even global recession raise investor fears.

At the same time, persistent inflation left little room for the Federal Reserve to rein in monetary policy tightening. This combination of difficulties presents a challenge to markets not seen since the late 1970s.

“The market is starting to worry regarding economic growth more than just cash withdrawal and inflation,” said Stephen Innes, managing partner at SBI Asset Management. “Unlike previous recessions, inflation is much higher and unemployment is much lower, and these dynamics are delaying any Possible trend to reduce the central bank’s tightening policy despite the rapid shift in interest rate expectations over the past week.

The MSCE index of global stocks fell during the first half of the year by 21%, the worst loss since at least 1988.

While the Bloomberg Composite Index, which tracks global investment-grade debt, fell by 14%, marking the worst performance since 1990, the earliest date for which data is available.

The dollar fell today less than 0.1%, which led to the rise of the euro and the pound sterling 0.2%, while the Stoxx 600 index rose 0.9%, and energy, travel and entertainment stocks were among the biggest gainers.

Italian bonds fell ahead of a meeting between Prime Minister Mario Draghi and five-star leader Giuseppe Conte to settle weeks of political tensions. The country’s 10-year bond yield jumped 7 basis points to 3.16%.