Many investors are speculating that the ECB, with its first interest rate hike in eleven years, could decide to raise interest rates more sharply than previously expected. Investors are therefore parting with Bunds.
Many investors sold German government bonds on Tuesday. This, in turn, drove the yield on 10-year Bunds to 1.797 percent, within reach of their most recent eight-and-a-half-year high. “Central banks have realized that inflation has not yet peaked,” said portfolio manager Mohammed Kazmi of private bank UBP. Therefore, more aggressive rate hikes must be expected. Against this background, the euro rose 0.2 percent to $ 1.0533.
Bitcoin stabilized after its hefty losses. The cryptocurrency gained 1.8 percent to $20,958. The market is apparently getting tailwind from the price jump of the troubled crypto bank Celsius, said analyst Timo Emden from Emden Research. “Investors are desperately hoping the company will bounce back.”
On the crude oil market, fears of a tightening supply are once again coming to the fore. US light oil WTI rose 0.9 percent to $110.65 a barrel. “Supply concerns are likely to persist in the coming months as Opec-plus countries, the world’s largest oil producers, may not have enough spare capacity,” said Leona Liu, an analyst at DailyFX. In addition, the summer travel season and the easing of corona restrictions by China boosted demand. “Although recession fears have increasingly become a headwind for oil prices, it is estimated that we still have at least half a year before a real recession,” Liu said. At the same time, fears of shortages are unlikely to abate until the Russia-Ukraine war is resolved or supply from the US or OPEC increases sharply, said Madhavi Mehta, a commodities analyst at Kotak Securities.