S&P 500 fell 0.67%, and the tech Nasdaq 0.61%
Among the blue chips, the shares of KGHM were the most heavily discounted, overvalued by 5.63%. In addition, banking sector companies continued to perform poorly.
Meanwhile, in the rest of the Old Continent, the market landscape looked somewhat better, although there were still indices closing below the line.
Among them were the French CAC40 (-0.07%), Spanish IBEX (-0.48%) and Italian FTSE MIB (-0.65%).
The session on Wall Street brought a third consecutive day of declines. At the close, the S&P 500 fell 0.67%, and the tech Nasdaq 0.61%.
The biggest pain for investors remains the debt market, where participants are increasingly losing patience with the unresolved situation in the Middle East.
American rally hits Polish bonds
On Tuesday, the yield on U.S. 10‑year bonds continued its upward rally and surpassed 4.6%, reaching its highest level in over a year. This atmosphere also affected investors in the Polish debt market, where the 10‑year yield began testing the 6% level.
The forward rate market is quite ambitious about the future monetary policy in Poland. Currently, valuations assume four rate hikes over the year. In our base scenario, the RPP will adopt a “wait and see” approach this year.
It is worth remembering that a reference rate of 3.75% implies fairly restrictive monetary conditions. However, assuming an alternative scenario in which the RPP decides on one or two interventionary rate hikes in the second half of the year, the current market bet on the start of a hike cycle should still be treated as an overreaction.
We use the same term to refer to the current level of yields in the Polish debt market. At the time of writing, minor sentiment dominates the Asian exchanges.
Hang Seng down ~0.8%, KOSPI ~2%, Nikkei ~1.6%
Hang Seng down ~0.8%, KOSPI ~2%, Nikkei ~1.6%. President Donald Trump, in one of yesterday’s statements, announced that he has postponed the decision to resume attacks for two–three days, perhaps until the beginning of next week, to "give Iran the chance to reach an agreement".
He also emphasized that he is conducting talks with U.S. allies in the Middle East. A lack of progress in negotiations over the next two days will undoubtedly increase investors’ nervousness before the weekend.
