18~22U.S. rates and oil prices shake stocks
18~22New York’s bond market is watching both the sell-off in UK government bonds and moves in international oil prices. The start of the new Federal Reserve chairmanship under Kevin Warsh is also approaching.
This week, 18~22New York’s bond market is focused on whether the global bond sell-off will continue. In particular, the sell-off in UK government bonds, known as gilts, is seen as the first factor to watch. When bond prices fall, yields rise.
The U.S.-China summit produced no solution to end the war in Iran. As a result, how much further international oil prices might rise remains a focus for the market. Rising oil prices could add to inflationary pressure.
This week also marks the point when Kevin Warsh’s era as chair of the Federal Reserve gets fully underway. Warsh is only awaiting his oath of office as chair. The Federal Reserve is the central bank that sets U.S. interest rates.
President Donald Trump nominated Warsh after searching for a chair who would cut interest rates substantially. However, the conditions Warsh will face were described as challenging, with overseas bond selling and the possibility of rising oil prices both in the picture.
After the Federal Reserve meeting last month, markets were looking to see how quickly rate cuts would proceed. This week, the bond market may reassess its rate expectations as the new chair’s tenure begins. Changes in rate expectations could also affect the stock market.
South Korean stocks often react sensitively to changes in U.S. interest rates and international oil prices. In particular, industries facing higher import costs and exchange-rate burdens need to keep an eye on oil price trends. Conversely, if expectations of lower interest rates grow, sentiment toward growth stocks and semiconductor investment could improve.
Sources: 연합인포맥스
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