Stocks were mixed and bonds gained Thursday as traders weighed Federal Reserve minutes that struck a less hawkish note with downbeat remarks on China’s economy by Premier Li Keqiang. 

Energy shares were among the best performing in Europe, as oil climbed amid data that showed further decrease in US crude and gasoline stockpiles ahead of the summer driving season. Mining shares slid alongside iron ore and most base metals amid concerns about China’s economy, while technology shares underperfomed and US futures fluctuated. 

Apple Inc. shares fell in premarket trading after a report said that the tech giant is planning to keep iPhone production roughly flat in 2022. Twitter Inc. rose after billionaire Elon Musk dropped plans to partially fund his purchase of the company with a margin loan tied to his Tesla Inc. stake and increased the size of the deal’s equity component to $33.5 billion.

Treasury yields and the dollar slipped. Fed policy makers indicated their aggressive set of moves could leave them with flexibility to shift gears later if needed. 

Investors took some comfort from the Fed minutes that didn’t show an even more aggressive path being mapped to tackle elevated prices, though central banks remain steadfast in their resolve to douse inflation. Still, volatility has spiked as the risk of a US recession, the impact from China’s lockdowns and the war in Ukraine simmer.

It’s time to buy the dip in stocks after a steep global selloff in equity markets, according to strategists at Citigroup Inc. Meanwhile, Fidelity International Chief Executive Officer Anne Richards said the risk of a recession has increased and markets are likely to remain volatile, the latest dire warning on the outlook at the World Economic Forum.

“If inflation gets tame enough over summer, there may not be continued raising of rates,” Carol Pepper, Pepper International chief executive officer, said on Bloomberg TV, adding that investors should look to buy tech stocks after the selloff. “Stagflation, I just don’t think that’s going to happen anymore. I think we are going to be in a situation where inflation will start tapering down and then we will start going into a more normalized market.” 

Most US policy makers saw half-point rate increases as appropriate at the next two meetings. While they noted the potential for rates to go high enough to constrain the economy, there were hints of a possible pause — an “expedited” tightening would leave the Fed “well positioned later this year to assess the effects of policy firming and the extent to which economic developments warranted policy adjustments.”

Markets continued to show traders pricing in 100 basis points of rate hikes over the next two meetings.

Russia’s central bank delivered its third interest-rate reduction in just over a month and said borrowing costs can fall further still, as it looks to stem a rally in the ruble and unwinds the financial defenses in place since the invasion of Ukraine.

The Bank of Korea raised its key interest rate on Thursday as newly installed Governor Rhee Chang-yong demonstrated his intention to tackle inflation at his first policy meeting since taking the helm. New Zealand’s central bank has also shown its commitment this week to combat surging prices.

Read: Unbroken Buyers Push S&P 500 to Fourth Straight Late-Day Bounce

Here are some key events to watch this week:

• US GDP, initial jobless claims Thursday
• US core PCE price index; personal income and spending; wholesale inventories; University of Michigan consumer sentiment Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.3% as of 10:35 a.m. London time
• Futures on the S&P 500 were unchanged
• Futures on the Nasdaq 100 fell 0.3%
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index was little changed
• The MSCI Emerging Markets Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro rose 0.1% to $1.0692
• The Japanese yen rose 0.4% to 126.81 per dollar
• The offshore yuan fell 0.6% to 6.7550 per dollar
• The British pound rose 0.1% to $1.2590

Bonds

• The yield on 10-year Treasuries declined two basis points to 2.73%
• Germany’s 10-year yield declined three basis points to 0.92%
• Britain’s 10-year yield advanced one basis point to 1.92%

Commodities

• Brent crude rose 0.6% to $114.69 a barrel
• Spot gold fell 0.5% to $1,845.07 an ounce

Source by: bloomberg