By Elizabeth Howcroft and Samuel Indyk LONDON (Reuters) – European stocks changed little on Thursday, staying close to last month’s highs, but fell the most in a quarter since early 2020 as oil prices fell and eastern Ukraine prepared for new attacks. Asian stocks fell and oil prices fell after news that the United States was considering releasing up to 180 million barrels of its strategic oil reserves as part of a move to lower fuel prices. Futures fell 3.7% to $ 109.28, while West Texas Intermediate futures fell 4.7% to $ 102.76. Oil prices have risen since Russia invaded Ukraine in late February, and the United States and its allies have responded with severe sanctions to Russia, Russia’s second-largest crude exporter. European stocks were mixed, but remained close to the highs reached earlier in the week as the investment climate became more positive over peace talks in Ukraine. That optimism has waned as Ukraine prepares for new Russian strikes ahead of Friday’s resumption of peace talks. Asian stocks fell as Chinese PMI data showed a decline in manufacturing and services in March. At 08:25 GMT, the MSCI World Equity Index fell 0.2% on the day, while the European Index fell 0.1%, just below the one-month high reached on Tuesday. The STOXX 600 was well on its way to a 5.8% drop in the first quarter of 2022, its biggest quarterly drop since it plunged 23% in the first quarter of 2020. Peter McCallum, a strategic interest rate analyst at Mizuho, said investors were still wary of Ukraine, with central banks facing a “stagnant inflation environment”. “It tends to be difficult for risk-averse assets to perform in this context, but I think there is a sense of relief right now among investors … there is more risk of valuation than any good news,” he said. . A recent sell-off in US bonds stopped and fell to 2.3416%, compared to the three-year high of 2.557% reached on Monday. A key part of the yield curve strengthened on Wednesday, easing recent moves that bet that the US Federal Reserve’s aggressive policy could lead the world’s largest economy into recession as it tries to curb sparking inflation. European government bond yields fell mostly by about 3-4 basis points, as falling oil prices helped address the recent sell-off of bonds. The German 10-year yield was set for the largest monthly increase since 1996. Following Wednesday’s data showing rising inflation in Germany and Spain, readings on Thursday showed that French inflation reached 5.1%. Data on inflation in Italy is expected at 09:00 GMT. “With the Russian invasion lasting more than five weeks now, we are increasingly seeing the impact reflected in official inflation figures,” Deutsche Bank (DE 🙂 strategic analyst Jim Reid wrote in a note to clients. Mizuho’s McCallum said he expects overall eurozone inflation data on Friday to be above economists’ expectations, but that a high measure is costing the market. The euro fell 0.2% to $ 1.1135, having strengthened earlier in the week from hopes for peace in Ukraine. The dollar traded slightly higher against the yen, with the pair at 121,935 having stabilized after the yen fell to its lowest level since 2015 on Monday, amid expectations that the Bank of Japan would be significantly more risky than the Fed. Commodity-linked currencies, such as the Norwegian crown, have been declining. Gold fell, but was still ready for its biggest quarterly rise since September 2020. changed slightly to about $ 47,132.
