Asian stocks fought back Wednesday to recover some of the losses suffered at the start of the week, while oil also bounced from a rout, though recession alarms continue to ring loud.
The euro clawed its way back slightly after hitting parity with the dollar for the first time in two decades, though it remains under pressure from growing concerns about an energy crisis across the eurozone and the European Central Bank's slower pace of monetary tightening.
Traders are also awaiting the release of a series of key indicators this week, including the all-important consumer price index later Wednesday, with expectations for another increase to a fresh 41-year high.
Another big spike in prices will reinforce the Federal Reserve's determination to lift interest rates 75 basis points for a second successive month in July, adding to concerns that officials could go too far and tip the economy into recession.
Still, Lauren Goodwin of New York Life Investments said policymakers were unlikely to shift from their hawkish tilt for now.
"This is widely expected to be a really strong print," she told Bloomberg Television.
"Even if it is not, I don't think that changes the Fed's perspective in a couple of weeks. We won't have enough evidence that inflation is convincingly turning over."
In a further sign of the pressure being felt around the world from surging prices, the New Zealand and South Korean central banks each lifted rates 0.5%age points Wednesday, the first such increase by Seoul since 1999.
While European markets enjoyed a rare advance thanks to bargain-buying, all three main indexes on Wall Street dropped.
Asian equities fluctuated in the morning but found some traction in the afternoon, with Hong Kong and Shanghai helped up by data showing a forecast-beating jump in Chinese exports, while there were also gains in Tokyo, Sydney, Seoul, Wellington and Taipei.
However, Singapore, Manila and Jakarta were in the red while Mumbai was flat.
London dipped at the open despite data showing the UK economy unexpectedly saw growth last month. Paris and Frankfurt also fell.
- Europe gas crisis -
Stephen Innes at SPI Asset Management said equities could continue to struggle owing to a perfect storm of crises engulfing trading floors.
"Typically, equity markets can deal with one risk relatively well," he said in a note. "But the current setup of sticky inflation, rapid Fed tightening, growth/recession risks and excessive rates volatility, to name a few, have at times left investors defenceless.
"And with the market coalescing to a bearish consensus, stocks are having trouble sustaining a meaningful rally."
Both main crude contracts were flat, staying below $100 and nowhere near recovering the more than seven% drops suffered Tuesday, hit by bets on a drop in demand and fears of more Covid-19 lockdowns in Shanghai.
The commodity has lost a large chunk of the gains seen after Vladimir Putin's invasion of Ukraine, despite bans on imports from Russia, with some analysts saying consumers were simply choosing not to buy fuel because of the high price.
Data from the American Petroleum Institute showed US stockpiles rose 4.76 million barrels last week, Bloomberg News reported citing people familiar with the figures, indicating demand slacking off even during the key summer driving season.
Joe Biden's visit to Saudi Arabia on Friday will be followed intently as he tries to persuade the crude giant to pump more to help reduce prices.
On currency markets, the euro held just above $1.0 a day after hitting parity on Tuesday for the first time since late 2022, with a worsening energy crisis fanning expectations that the eurozone will plunge into recession.
With Russian energy giant Gazprom starting 10 days of maintenance Monday on its Nord Stream 1 pipeline, the bloc -- and particularly gas-reliant Germany -- is waiting nervously to see if the taps are turned back on.
"A prolonged cut to the gas supply would halt a lot of economic activity, sending (Germany) deep into recession," said Tapas Strickland at National Australia Bank.
He said July 21 -- when the gas should be switched back on -- will be a crucial date.
"That date also happens to be the day of the next ECB meeting," he added. "Either of these events are key risk events. Russia playing gas politics by not switching on the gas supply would likely see the euro lurch much lower."
- Key figures at around 1.20pm -
Tokyo - Nikkei 225: UP 0.5% at 26,478.77 (close)
Hong Kong - Hang Seng Index: UP 0.2% at 20,891.82
Shanghai - Composite: UP 0.1% at 3,284.29 (close)
London - FTSE 100: DOWN 0.3% at 7,191.14
Euro/dollar: DOWN at $1.0033 from $1.0037 Tuesday
Pound/dollar: UP at $1.1915 from $1.1889
Euro/pound: DOWN at 84.22 pence from 84.40 pence
Dollar/yen: UP at 137.20 yen from 136.84 yen
West Texas Intermediate: UP 1.0% at $96.75 per barrel
Brent North Sea crude: UP 1.1 at $100.59 per barrel
New York - Dow: DOWN 0.6% at 30,981.33 (close)
