World shares mixed; bitcoin holds steady near $20,000
TOKYO — European benchmarks were higher Monday after most Asian markets retreated, while the price of bitcoin hovered near $20,000.
U.S. futures advanced, while oil prices fell back Monday morning.
The price of the world’s most popular cryptocurrency remained near the psychological benchmark of $20,000 after bouncing during the weekend. At one point, bitcoin plunged nearly 10% to under $18,600, according to the cryptocurrency news site CoinDesk.
As of 0500 ET (0900 GMT) Monday, it was at $20,650.56.
France’s CAC 40 gained 0.2% to 5,893.20. Germany’s DAX added 0.2% to 13,150.16. Britain’s FTSE 100 rose 0.5% to 7,049.87. Monday, Juneteenth is a holiday in the United States. The future of the Dow industrials was up 0.4%, while the future for the S&P 500 gained 0.5%.
China maintained its prime rates for 1-year and five-year loans, as expected. Considering China’s inability to control outbreaks and its already fragile economy, rate cuts in the next months are still possible. We expect the economic recovery under the COVID zero policy to be slow. In a commentary, Iris Pang (chief economist Greater China at ING) stated that after the rate pause, the government should give more fiscal stimulus.
Japan’s benchmark Nikkei 225 slid 0.7% to finish at 25,771.22. Australia’s S&P/ASX 200 slipped 0.6% to 6,433.40. South Korea’s Kospi dropped 2.0% to 2,391.03. Hong Kong’s Hang Seng edged up 0.4% to 21,163. 91, while the Shanghai Composite was little changed, inching down less than 0.1% to 3,315.43.
Two of the three largest economies in the world, China and Japan are not raising interest rates. This is in contrast to the U.S. Federal Reserve, and central banks in many countries. There are fears that the global economy could slip into recession if planners push too aggressively for interest rate hikes. Markets have reacted after share prices surged due to massive support during the pandemic.
Despite concerns about the weakening of the yen, Japan’s central banks remained firm to their near zero interest-rate policy last week.
The U.S. dollar was trading at 134. 76 Japanese yen, down from 135 yen late Friday. The euro cost $1. 0525, up from $1.0489.
Testimony by Federal Reserve Chair Jerome Powell to the Senate Banking Committee is scheduled for later in the week.
Markets anticipate a world of higher interest rates, fueled by the Federal Reserve’s moves. While higher rates can reduce inflation, they also increase the risk of a slowing down of the economy and causing a recession. They can also hurt stocks, cryptocurrencies, and other investments.
Last Week, the Fed increased its key short-term rate by three times the usual amount. This was the Fed’s largest increase since 1994.. It could consider another mega-hike at its July meeting. A report on the U.S. economy last week showed that industrial production was lower than expected.
In energy trading, benchmark U.S. crude lost 42 cents to $109. 14 a barrel in electronic trading on the New York Mercantile Exchange. It plummeted $7. 26 to $107. 99 a barrel on Friday. Brent crude, an international standard, fell $1. 35 to $111. 77 a barrel.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
I have been writing professionally for over 20 years and have a deep understanding of the psychological and emotional elements that affect people. I’m an experienced ghostwriter and editor, as well as an award-winning author of five novels.