Global stocks declined while the dollar strengthened as investors awaited the outcome of a meeting of central banks this week with the main focus directed at the Federal Reserve (Fed).
The Fed is expected to signal a faster reduction in asset purchases which will also see a faster rise in interest rates. The Fed’s policy -making committee will also update rate ratings by its members over the next few years.
The dollar remained soaring ahead of this week’s meeting with investors expecting the Fed to raise interest rates in 2022.
The focus is also on the meetings of the European Central Bank (ECB), Bank of England (BoE) and Bank of Japan (BOJ) in determining their monetary policy.
Concerns about the Omicron variant affecting the US and European markets after UK Prime Minister Boris Johnson warned of a new 'wave' of cases of the variant and the World Health Organization (WHO) also posed a 'very high' global risk by giving vaccine indications existing ones are unable to fight it.
The FTSE index slipped 0.83% with the pan-European STOXX 600 down 0.43% and the worldwide MSCI stock gauge down 0.80%.
The Dow Jones Industrial average index fell 320.04 points or 0.89% at 35,650.95, the S&P was down 43.05 points or 0.91% at 4,668.97 and the Nasdaq Composite was down 217.32 or 1.39% at 15,143.28.
The dollar index rose 0.27% with the Euro falling 0.01% at $ 1.1282 as it was exposed to a US rate hike against expectations the Fed would tighten policy faster than the ECB.
The 10 -year U.S. treasury yield benchmark eased and the yield curve flattened as traders prepared for a hawkish tone from the Fed at their meeting.
10 -year treasury note yields fell 6.5 basis points at 1.424% and 30 -year treasury bond yields fell 6.7 basis points at 1.817%.
The ECB meeting on Thursday is likely to confirm a 1.85 trillion Euro or $ 2.09 trillion pandemic emergency stimulus scheme will end in March 2022 and expectations for a rate hike at the BOE meeting have been withdrawn as Omicron adds to concerns about the short -term economic outlook.
Brent crude futures were down 1.01% or $ 74.39 a barrel while US West Texas Intermediate (WTI) crude oil prices were down 0.53% at $ 71.29.
