On Tuesday, world stocks were mixed while bond yields and oil prices fell, as traders were concerned about additional tightening from central banks. Plus, there were also worries about the health of global economies.

Currencies’ performance

In recent weeks, the US dollar has burnished its role as a safe haven asset for investors at a time when they are worried about economic health. This is because the greenback surged to a two-decade high against a number of its peers, while the euro declined to reach parity against the US dollar.

There was a 0.49% increase in the continent-wide STOXX 600 index, while the MSIC’s gauge of global stocks recorded a decline of 0.22%. The euro has shown a lot of vulnerability of late because of the impact on the regional economy of the ongoing rise in prices of natural gas. It has also been under pressure because of the Russia and Ukraine conflict and the fact that the European Central Bank (ECB) is behind its peers in terms of monetary policy tightening.

There was a 0.148% fall in the US dollar index, which measures the currency against a basket of others. Meanwhile, the euro had climbed by 0.12% to reach $1.0051 and the yen came close to its weakest level seen in over 20 years.

Economic data

The earnings season is beginning this week in the US and analysts have already tempered their profit estimates. Banks are set to kick off the session, with big names like Morgan Stanley, JPMorgan Chase & Co, Well Fargo & Co, and Citigroup Inc. to begin.

On Tuesday, an index published showed that there was a decline in German investor sentiment in July. There are other economic data that will also remain the focus this week, which includes the US inflation numbers that are due on Wednesday because they will have a direct impact on the stance of the US Federal Reserve in its policy meeting next week.

A high reading has added pressure on the US central bank to hike up the interest rates even more aggressively, as inflation does not appear to be coming down.

Index performance

There was a 0.16% increase in the Dow Jones Industrial Average, while a 0.15% loss was recorded in the S&P 500. As for the Nasdaq Composite, it saw a fall of 0.13%. There was also a 0.14% decline in the MSCI index of Asia-Pacific shares not including Japan for the day, while a 1.77% drop was seen in Japan’s Nikkei 225 index.

Investors are also keeping an eye out on how an increasing number of cities in China are adopting the new COVID-19 curbs that have been implemented for controlling the spread of new infections. This was after a new sub-variant of Omicron had been identified in the country, which has proven itself to be highly transmissible.

There was also a 3.1 basis points decline in 10-year Treasury yields, as they reached 2.960%, which had dropped below 3% overnight, as a sell-off on Wall Street pushed investors towards Treasuries.