Stocks Shake Off Losses After Putin’s Nuclear Threat; dollar rises before Fed

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Global stocks rose on Wednesday, recovering from an early hit to risk appetite after Russian President Vladimir Putin accused the West of “nuclear blackmail”, sparking a flight towards haven assets such as gold and bonds.

* Crude oil prices rose briefly on fears that the escalating war in Ukraine will reduce oil and gas supplies, while the dollar appreciated on expectations that the Federal Reserve will announce a large interest rate hike to 1800 GMT.

* European stocks trimmed early losses and advanced. US stocks rose ahead of the Fed’s rate hike and accompanying statement, which investors hope will provide clues about next year’s hikes.

* “Putin’s move has contributed to dollar strength and euro weakness ahead of the FOMC (Federal Open Market Committee) meeting. There was already risk,” said Marc Chandler, Bannockburn Global Forex. “Putin pushed a door open.”

* As of 1607 GMT, Wall Street’s three major indices were up around 0.5%, while the pan-European STOXX 600 closed 0.9% better and MSCI’s measure of global equities gained 0.19. %.

* Putin ordered the mobilization of Russia to fight in Ukraine and made a thinly veiled threat to use nuclear weapons, in what NATO called a “reckless” act of desperation in the face of impending defeat.

* The dollar index , which compares the greenback to a bag of six major currencies, hit its highest since 2002 at 110.89 units. The euro was down 0.76% at $0.9894, falling further below parity, and the yen was down 0.29% at 144.13 per dollar.

* El rendimiento de los bonos referenciales del Tesoro a 10 años bajaba desde máximos de 11 años, revirtiendo la mayor parte de las ganancias de la víspera. Los retornos volvían a acercarse a los máximos de varios años alcanzados esta semana, impulsados por los bancos centrales, decididos a sofocar la aceleración de la inflación.

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* Más de una docena de bancos centrales anunciarán sus decisiones políticas esta semana, entre ellos el Banco de Japón y el Banco de Inglaterra.

* El rendimiento de las notas alemanas a dos años, las más sensibles a las expectativas de tasas, subía 3 puntos básicos, al 1,765%, un nuevo máximo de 11 años. El retorno de los papeles del Tesoro a 10 años, que tocó el martes el 3,604% por primera vez desde abril de 2011, cedía 2 puntos básicos, al 3,5534%.

* Fears of a new hit to global energy supply pushed crude oil and natural gas prices higher, boosting shares of major producers. However, they later fell by more than 0.65%, as a rising dollar and global recession concerns offset concerns about a Russian military mobilization.

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