Inflation Fears Dominate Markets Again
Markets around the world sank to a six-week low. US equity futures also dropped. A general atmosphere in the markets was pervaded with fears of inflation. The MSCI World Index carried its losses over to the fourth day, shedding 0.6%. It is the Index’s longest selloff since September 2020. Contracts at the S&P 500 slipped 0.4%. Asian and European equities slipped even lower. Even though Colonial Pipeline restarted working, oil retreated. Bitcoin dipped and traded at $50,000, after Tesla Inc. put purchases with the cryptocurrency on hold.
Investors have lately lost their confidence in the speedy economic recovery. Non-farm payrolls disappointed, not meeting investors’ expectations. Inflation also rose by the most since 2009. Investors think that consumer prices will continue climbing and will force the Federal Reserve to taper its stimulus.
In Europe, companies continued publishing their earnings reports. This time, however, they failed to meet analysts’ expectations. Disappointing earnings results weighted heavily on the European market. The reporting companies immediately slid. BT Group retreated 4.2%. Burberry Group shed whopping 8%. The Treasury 10-year rate was near 1.69%.
Elon Musk announced that Tesla would not accept payments in Bitcoin, since cryptocurrency was not environmentally-friendly. The crypto token immediately shed 15%.
These are the events traders should watch on Thursday:
Futures on the S&P 500 Index lost 0.3% during the early hours of the European session. The Stoxx Europe 600 Index shed 1.4%. The MSCI Asia Pacific Index slid 1.5%. The MSCI Emerging Markets Index gave up 1.3%.
The Dollar Spot Index was little changed. The euro decreased 0.1% to $1.2065. The British pound slid 0.1% to trade at $1.4037. The onshore yuan was little changed at 6.456 per dollar. The Japanese yen added 0.1% to 109.56 per dollar.
West Texas Intermediate crude slipped 1.9% to $64.80 a barrel. Brent crude took a 1.8% dive to trade at $68.07 a barrel. Gold was little changed at $1,815.13 an ounce.
The yield on 10-year Treasuries retreated less than one basis point to 1.69%. The yield on two-year Treasuries lost less than one basis point to 0.16%. Germany’s 10-year yield advanced two basis points to -0.11%. Britain’s 10-year yield climbed two basis points to 0.909%. Japan’s 10-year yield surged one basis point to 0.094%.
Have a productive trading day!