Global rebound stutters as dollar weakens

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European shares were steady following a late downswing in Asia, as markets struggled to find direction after last week’s rout. The dollar weakened against most major currencies and Treasuries edged higher with gold.

The Stocks Europe 600 Index traded little changed after a jump yesterday, while S&P 500 futures declined. In Dublin, the Iseq was down by about 0.25 per cent at 8.30am. The 10-year Treasury yield fell back after touching 2.89 per cent and German bunds steadied. Commodities found support from the weaker dollar, with Brent crude heading for the first advance in a eight sessions, and bullion set for back-to-back gains. South Africa’s rand fluctuated as the country’s ruling African National Congress party decided to tell President Jacob Zuma to step down.

A jump in global equities yesterday wasn’t enough to put traders’ minds at ease that the volatility that wiped $2 trillion from US stocks last week has come to an end. US consumer-price data due Wednesday could give some clues on direction, given that pressure on equities has been emanating from the outlook for inflation. Hedge funds and other large speculators have boosted bets on Treasury futures to a record, indicating they expect the 2018 bond-market rout will resume in the days ahead.


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