European shares are lower today (April 19) as investors continue to weight the economic
impacts of the escalating war in Ukraine and interest rate hikes by central banks around the
world.
European companies Heineken (HEIN), Nestle (NESN) and Renault (RENA) each report
earnings this week along with Netflix (NFLX), Tesla (TSLA) and Verizon (VZ) in the U.S.
Yields on 10-year U.S. inflation linked bonds held near two-year highs and are close to turning
positive for the first time since the onset of the COVID-19 pandemic.
The pan-European STOXX 600 index was down 1.1%, Germany’s DAX was down 0.9% and
Britain’s FTSE 100 was 0.4% lower in trading. The MSCI world equity index that tracks shares in
50 countries, was 0.3% lower.
Meanwhile, S&P 500 futures in the U.S. are down 0.3% and Nasdaq futures declined 0.4%.
The U.S. Federal Reserve looks all but certain to raise its interest rate by 50 basis points when
it meets in May and a 75-basis point hike hasn’t been ruled out by economists.
The dollar index rose above 101 for the first time since March 2020, as the greenback hit a 20-
year high against the yen and tested a two-year peak on the euro, amid higher U.S. Treasury
yields.
The divergence in monetary policies between Japan and the United States has pushed the yen
to its weakest level against the U.S. dollar since 2002 at 128.465.
The benchmark 10-year Treasury yield was last at 2.8877%, after earlier reaching its highest
level since late 2018 at 2.909%. The 30-year U.S. Treasury yield rose above 3.0% for the first
time since early 2019.
At the same time, oil prices edged lower but remained near their highest level since mid-March
as investor worried over tight global supply after Libya was forced to halt some oil exports as
forces in the east expanded their blockade of the sector.
Brent crude oil futures were down 1.3% at $111.66 U.S. a barrel. U.S. crude oil futures were
down 1.5% at $106.57 U.S. per barrel.