Global sales intensified after a surprise US inflation surge that put pressure on the Federal Reserve to intensify monetary tightening. Treasury yields traded at a maximum of several years.
S&P 500 futures fell 2.5% and Nasdaq 100 contracts 3.1%. The S&P 500 is flirting with a bearish market after Friday’s consumer price report sparked more than $ 1 trillion in sales. The Stoxx 600 was trading at its lowest level since early March.
10-year U.S. Treasury bond yields reached 3.24 percent, the highest since October 2018, and the sale of European government bonds also accelerated, with the yield on public debt two-year-old German who surpassed 1 percent for the first time in more. more than a decade.
The exodus of stocks and bonds is gaining momentum in the face of fears that the central bank’s battle against inflation will end up killing economic growth. Investments along the Treasury yield curve point to fears that sharp Fed interest rate hikes will cause a hard landing.
“The Fed will not be able to stop the tightening, let alone start easing,” said James Athey, the bank’s chief investment officer. “If all the world’s central banks offer what is priced, there will be some significant negative shocks to the economies.”
Traders are now putting prices at 175 basis points of the Fed tightening in September, which means two half-point increases and a 75 basis point increase. If that happens, it will be the first time since 1994 that the Fed has resorted to such a draconian measure.
Meanwhile, the dollar rose while the yen weakened to a 24-year low. Oil and iron ore experienced declines in growth-sensitive commodities.
The bad sentiment was also evident in a cryptocurrency slide that took Bitcoin below US $ 25,000 to its lowest level in 18 months.
What to see this week:
- First WTO ministerial meeting in almost five years. Until June 15.
- ECB spokesman Luis De Guindos is due to speak on Monday.
- US PPI, Tuesday.
- Key data on China’s economic activity, liquidity operations, medium-term loan facility, Wednesday.
- FOMC tariff decision, President Jerome Powell briefing, U.S. trade inventories, empire manufacturing, retail sales, Wednesday.
- ECB President Christine Lagarde is due to speak on Wednesday.
- Bank of England rate decision, Thursday.
- Home starts in the US, initial unemployment claims, Thursday.
- Bank of Japan policy decision Friday.
- Eurozone CPI on Friday.
- US Conference Board Leading Index, Industrial Production, Friday
Some of the main movements in the markets:
Stocks
- S&P 500 futures fell 2.5% at 5:51 a.m. New York time
- Nasdaq 100 futures fell 3.1%.
- Dow Jones Industrial Average futures fell 2%.
- The Stoxx Europe 600 fell 2.2%.
- The MSCI World Index fell 1%.
Coins
- The Bloomberg Dollar Spot index rose 0.7%.
- The euro fell 0.5% to $ 1.0464
- The British pound fell 0.9% to $ 1.2208
- The Japanese yen fluctuated slightly to $ 134.49
Good
- The yield on 10-year Treasury bonds advanced eight basis points to 3.23 percent
- Germany’s 10-year yield advanced five basis points to 1.56%.
- 10-year British profit rose three basis points to 2.48%.
Goods
- West Texas Intermediate crude fell 1.4% to $ 119 a barrel
- Gold futures fell 0.9 percent to $ 1,859.20 an ounce