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World stocks drop, dollar steady as BoJ, U.S. data in focus

written by Bella Palmer

MSCI's broadest index of world shares shed 0.1 per cent and European shares opened on a slide led by a decline in real estate stocks

World stocks dropped on Monday, while the dollar steadied ahead of a week including a Bank of Japan policy announcement and a key data on U.S. inflation.

MSCI's broadest index of world shares shed 0.1 per cent. European shares opened lower, led by a decline in real estate stocks but then remained flat after shipping stocks increased across European exchanges.

The pan-European stock index traded largely flat by 1021 GMT, after its fifth consecutive weekly gain on Friday, its longest streak since April.

By 1023 GMT, D'Amico International Shipping, Hapag Lloyd and Hafnia gained between 4 and 2 per cent. Frankfurt-listed shares in Scorpio Tankers and Nordic American Tankers added 5 and 8 per cent, respectively.

Oil prices dropped towards last week's five-month low amid doubts all OPEC+ producers will stick with caps on output.

Lower exports from Russia and the attacks in the Red Sea seemed priced in to crude oil as Brent dropped 64 cents to $75.93 a barrel, while U.S. crude lost 61 cents to $70.82 by 1030 GMT.

Florian Ielpo, head of macro at Lombard Odier Investment Managers, said that in recent days he had seen less market reaction to macro economic data and more moves in stock and bond markets after remarks made by central bank policy makers.

We will see this week, genuinely, how the market digests a Fed pivot, said Ielpo who noted that so far, stocks had gained and credit spreads widened, with a growing difference between corporate and sovereign bond yields with the same maturity.

The BoJ's policy decision on Tuesday will likely be the main event in Asia this week. April was favoured by 17 of 28 economists as the beginning for negative rates to be cut, making the Bank of Japan one of the few central banks in the world actually tightening.


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