January 10, 2022

Stock Markets Weak On Concerns US Inflation Readings

 Asian stock markets weakened on Monday causing bonds to rise and tech stocks to decline amid investor sentiment concerns over U.S. inflation readings that will see an earlier rate hike by the Federal Reserve (Fed).

The S&P 500 futures were down 0.2% and the Nasdaq Composite futures were up 0.1%.

MSCI’s broadest index of Asia-Pacific stocks outside Japan flat with South Korea falling 0.7% and Japan’s Nikkei stabilizing from a 1.0% fall last week.

A US consumer price report released on Wednesday showed inflation rising high at 5.4% has led the Fed to accelerate rate hikes and the unemployment rate to fall 3.9%.

The US 10 -year treasury yield note rose to an all -time high in early 2020 at 1.765% up 25 basis points since late 2019.

Meanwhile, the Fed’s more hawkish shift has benefited the dollar despite profit -taking activity on Friday after a payroll report that did not meet market expectations.

The dollar index remained at 95.764 from Friday’s decline of 0.5% but had support at 95.568.

The euro jumped to $ 1.1354 above the $ 1.1184/1.1382 trading range while the Japanese Yen was at 115.64 when the dollar was at 116.34 last week.

Commodity markets saw gold strong at $ 1,795 an ounce and oil prices fell from a 5% increase last week due to supply disruptions in Kazakhstan and Libya where Brent oil prices fell 28 cents to $ 81.47 and US crude oil fell 36 cents to $ 78.54.