• In US economic data, consumer inflation expectations fell from rose from 6.6% to 6.3% in April (survey: 6.8%). Wholesale inventories rose by 2.3% in March (survey: +2.3%).
• European sharemarkets were weaker on Monday on fears of prolonged Covid-19 curbs in China. Travel & leisure lost 6% with technology down 5% and miners falling 4.4%. Rising bond yields were also an influence in driving technology shares lower. And the Sentix measure of investor morale in the euro zone fell to a 2-year low in May. The pan-European STOXX 600 index fell by 2.9% to two-month lows. The German Dax lost 2.2% and the UK FTSE fell by 2.3%. In London trade shares in Rio Tinto fell by 4.6% and shares in BHP fell by 4.4%.
• US sharemarkets fell on Monday. Technology led the declines. Early in the session US 10-year bond yields hit 3½-year highs of 3.20%, before falling later in the day. Investors also fretted about an economic slowdown in China due to rising Covid cases. The energy sector fell by 8.3% as oil prices fell. Shares in Boeing fell 10.5% – the biggest weight on the Dow Jones index. Shares in Apple fell 3.3% – the biggest weight on the S&P500 and Nasdaq. At the close the Dow Jones was down by 654 points or 2.0%. The S&P 500 index fell by 3.2%. And the Nasdaq index lost 521 points or 4.3%.
• US long-term treasuries rose on Monday (yields lower). After hitting 3-year highs of 3.20%, US 10-year yields fell by 9 points to near 3.03%. And US 2-year yields fell by 10 points to near 2.60%.
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• Major currencies were mixed against the US dollar in European and US trade. The Euro rose from near US$1.0495 to US$1.0590 and was near US$1.0560 at the US close. The Aussie dollar fell from near US70.25 cents to US69.48 cents and was near lows at the US close. And the Japanese yen lifted from 131.34 yen per US dollar to JPY130.12 and was at JPY130.20 at the US close.
• Global oil prices slumped on Monday on fears of slower demand from the world’s top importer, China, on continued Covid lockdowns in the country. There was also uncertainty whether the proposed European Commission embargo on Russian oil would proceed. The proposal needs a unanimous vote by EU members this week to pass. Saudi Arabia, the world’s top oil exporter, also lowered crude prices for Asia and Europe for June. The Brent crude price fell by US$6.45 or 5.7% to US$105.94 a barrel. US Nymex crude fell by US$6.68 or 6.1% to US$103.09 a barrel.
• Base metal prices fell on Monday by between 1.8-6.3% with copper down the least and nickel down the most.
• The gold futures price fell by US$24.20 or 1.3% to US$1,858.60 an ounce. Spot gold was trading near US$1,853 an ounce at the US close. The iron ore futures price fell by US$6.45 or 4.7% to US$131.99 a tonne. Ahead: In Australia, the NAB business survey is released with retail trade, weekly consumer confidence and the CBA Household Spending Intentions report. In the US, the business optimism index is released with the economic optimism index and weekly chain store sales.
Originally published by CommSec