MARKETS

Having weathered a dire 2022, many global hedge fund managers are preparing this year for persistent inflation and seeking exposure to commodities and bonds that perform well in such an environment.

The euro nursed losses on Wednesday and has helped the dollar to make a strong start to 2023, after a surprise slowdown in German inflation rallied bunds and sent the common currency sliding.

Global stocks rallied Tuesday thanks to a New Year boost, which is clouded however by rising interest rates, recession worries and Russia's war on Ukraine.

The dollar edged up on Monday, pulling away from recent six-month lows against a basket of major currencies.

World stocks inched higher, European bond yields dropped and the dollar held firm in light trading on Monday following warnings from the International Monetary Fund's managing director that a third of the world will fall into recession in 2023.

Heavy falls in stock and bond markets over the last year have cut the combined value of the world's sovereign wealth and public pension funds for the first time ever - and to the tune of $2.2 trillion, an annual study of the sector has estimated.

World stocks were steady and U.S. stock index futures indicated a lower open on Wall Street on the last trading day of 2022, but equities are on course for a 20% drop over a year marred by high inflation and war in Europe.

The dollar was on track for its best performance in seven years on Friday, having been buoyed by the Federal Reserve's aggressive monetary policy tightening and concerns about the global growth outlook.

Oil prices edged up on Friday and were on track to post a second straight annual gain, albeit a meagre one, in a year marked by tight supplies due to the Ukraine conflict, a strong dollar and weak demand from the world's top crude importer China.

The dollar slipped on Thursday after rising in the previous session, with investors on edge at the end of the year as initial optimism over China's reopening fizzled.

European stock indexes were mixed on Thursday as global recession fears weighed on markets and soaring COVID-19 cases in China countered earlier optimism about the country dropping its strict zero-COVID policy.

Stocks sank in Asia and wavered in Europe on Thursday, with sentiment clouded by China's Covid surge.

U.S. oil major Exxon Mobil Corp is suing the European Union in a bid to force it to scrap the bloc's new windfall tax on oil groups, arguing Brussels exceeded its legal authority by imposing the levy.

Wall Street's main indexes ended weaker on Wednesday, with the Nasdaq hitting a 2022 closing low, as investors grappled with mixed economic data, rising COVID cases in China, and geopolitical tensions heading into 2023.

It has been a rough 12 months for emerging markets that have seen more governments stumble into default, currencies suffer and double-digit losses in stocks and bonds alike - though many investors are optimistic that 2023 could bring some relief.

Stock markets diverged on Wednesday as investors looked for a traditional "Santa Claus rally" to close the year.

European shares were subdued on Wednesday, while UK's FTSE 100 outpaced peers after a long Christmas holiday weekend as investors assessed Beijing's steps towards reopening its COVID-battered economy.

Wall Street ended lower at the beginning of a holiday-shortened week on Tuesday, as rising U.S. Treasury yields pressured interest rate sensitive megacap shares.

European and Asian markets advanced on Tuesday after China said it would end quarantines for overseas arrivals, spurring hopes for the revival of the world's second-largest economy.

Oil prices rose in light trade on Tuesday on concerns that winter storms across the United States are affecting logistics and production of petroleum products and shale oil.

The dollar moved broadly lower on Tuesday while Australia and New Zealand's currencies jumped as risk appetite grew after China said it will scrap its COVID quarantine rule for inbound travellers - a major step towards easing curbs on its borders.

A look at the day ahead in Asian markets from Jamie McGeever.

The United States has become a global crude oil exporting power over the last few years, but exports have not exceeded its imports since World War II. That could change next year.

EU countries are worried that they will have a hard time filling gas storage tanks in time for next winter.

Wall Street closed lower on Monday for a fourth straight session with Nasdaq leading declines as investors shied away from riskier bets, worried the Federal Reserve's tightening campaign could push the U.S.

Asia's stockmarkets made a wobbly start to the final full trading week of 2022, with the prospect of interest rates rising further next year taking the edge off festive cheer.

Oil prices reclaimed ground on Monday after tumbling more than $2 a barrel in the previous session as optimism from China's reopening and oil demand recovery outweighed concerns of a global recession.

A group of investors has tabled resolutions urging four of the world's top oil and gas companies to set broad climate targets for 2030, reviving pressure on the sector after a year that saw governments shift their focus to energy security.

Forget a year-end rally in financial markets. The message from major central banks is loud and clear: the battle to tame inflation is far from over.