Dollar up as US President, Biden confirms re-election bid

The dollar was largely higher Tuesday as Joe Biden confirmed his bid to run for re-election as US president next year.

The announcement comes with the US economy still battered by high inflation and interest-rate rises, triggering concerns of a possible recession.

Worries that the global economy could enter a downturn this year continued to weigh heavily on stock markets Tuesday, however.

“Equity markets are slightly under pressure on Tuesday following a wide array of earnings releases and as investors eye further US data later in the week,” said Craig Erlam, senior market analyst at OANDA trading platform.

Wall Street opened lower, with the Dow dipping less than a tenth of a percentage point at the open. The broader S&P 500 shed 0.4 percent and the tech-heavy Nasdaq Composite shed 0.6 percent.

Briefing.com analyst Patrick O’Hare said there was plenty of good earnings news among US firms but that it did not seem to be enough to persuade investors.

He said an earnings miss by UPS, which along with its rival parcel shipping companies are seen as a bellwether for the overall economy, “was piquing concerns about the broader economic outlook and earnings prospects”.

Shares of regional bank First Republic (FRC) fell 28 percent after the bank reported of a 40 drop in deposits, adding to worries about mid-size lenders in the US after three banks collapsed last month.

In Europe, London and Frankfurt were flat in afternoon trading, while Paris was lower.

Following recent shocks in the banking sector, UBS on Tuesday posted an underwhelming first quarter net profit of $1.0 billion but insisted it had seen strong client inflows as it prepared to integrate its stricken rival Credit Suisse.

Shares in UBS, Switzerland’s biggest bank, fell around four percent in early trading following the announcement, but recovered much of that loss.

Asian markets ended mostly lower, with Hong Kong falling sharply on the back of major losses in Chinese firms, as a lack of clear direction ahead of key announcements this week presented a challenge for global investors.

It was the third straight day of losses on the Hang Seng Index, with Alibaba Group Holdings down more than three percent, internet giant Baidu down nearly four and pharmaceutical maker Wuxi Biologics dropping almost seven.

“Investors seem to be having concerns about the sustainability of the recovery in China and the heightening of geopolitical tensions,” Redmond Wong, of Saxo Capital Markets HK, told Bloomberg.

No ‘clean read’

Traders have largely been treading water ahead of earnings results from US tech behemoths such as Amazon, Microsoft, Facebook owner Meta and Google parent Alphabet.

Alphabet and Microsoft report after the close of US trading.

Stephen Innes of SPI Asset Management said in a note that despite “a reasonably constructive picture on the economy front”, it was tough to get “a clean read on anything happening this week”.

“One of the most challenging things about navigating this bear market and the widely anticipated coming recession is that we’ve had to differentiate between real and nominal economic and market variables like nothing in recent decades,” he said.