Stocks remained largely higher on Tuesday as China data showed signs of recovery and Beijing’s push to spur economic growth.
Shares in Mainland China, Thailand, South Korea and Hong Kong remained higher while Japan dropped.
Euro-zone inflation accelerated to a fresh all-time high, intensifying the debate at the European Central Bank about how rapidly to raise interest rates. Consumer prices jumped 8.1% from a year earlier in May.
US stock futures were lower. Treasury yields jumped across the curve, joining a selloff in German bunds and European bonds Monday. The dollar advanced.
“It’s very hard to have conviction at the moment,” Mike Bell, global market strategist at JPMorgan Asset Management, said in an interview with Bloomberg Television.
“We think it makes sense to be neutral on stocks and pretty neutral on bonds actually.” The possibility that Russia could retaliate to the EU move on oil by disrupting gas flows “would make me be careful about being overweight risk assets at the moment,” he said.
Meanwhile, President Joe Biden will hold a rare Oval office meeting on Tuesday with Fed Chair Jerome Powell amid the highest inflation in decades and ahead of US payroll numbers later this week.
“This time, the Fed’s tightening cycle will be longer, and policy rates and bond yields will have to go higher than markets currently expect,” Franklin Templeton Fixed Income Chief Investment Officer Sonal Desai said in a note. “The corresponding risk to asset prices and economic growth is greater than many like to admit.”
Crude oil climbed on EU’s partial ban on Russian oil with the WTI trading around $118 and Brent trading around $123 a barrel.