Crying uncontrollably as the reading of the U.S. consumer price index (CPI) data soared to a 40 -year high, causing equity markets to plummet.
The US inflation reading jumped 9.1% on an annual basis, and this prompted new expectations that the Federal Reserve (Fed) will implement an interest rate hike by 100 basis points.
The base was reached after the Central Bank of Canada (BOC) acted to raise its rate by 100 basis points, the largest increase since 1998.
Even so, central banks expect the Fed to raise rates by 75 basis points for the second time at a July policy meeting in controlling soaring price pressures.
This has caused Wall Street to close in negative territory with the Dow Jones Industrial average index falling 0.67%, the S&P 500 losing 0.45%and the Nasdaq Composite down 0.15%.
MSCI’s worldwide stock gauge fell 0.31% and the pan-European STOXX 600 lost 1.01%.
The European zone also suffered a decline where Germany’s DAX and France’s CAC40 doubled losses to 1.5% and 1.4% while London’s FTSE also suffered the same fate.
Commenting Rober Alset of Close Brothers Asset Management, the only good news is that core inflation is slightly lower while the outlook for the European economy will worsen due to the ongoing Russian gas issue.
Revealing Asian equity markets, the MSCI Asia-Pacific broad index opened weaker with Japan’s Nikkei down 0.11%, Topix down 0.32% and South Korea’s Kospi down 0.66% while Kosdaq lost 0.37%.
Currency flows saw the dollar continue to strengthen but its index measure against other major rivals fell 0.148% with the Euro up 0.17% at $ 1.0053 and the Japanese Yen trading at $ 137.63.
The 2 -year Treasury yield note was at 3.187%, higher than the 10 -year note at 2.9465% in the inversion of the yield curve.
For commodities, US crude was up 0.06% at $ 95.90 while Brent crude was down 0.18% at $ 99.31.
Crypto trading, meanwhile, showed a decline with Bitcoin (BTC) falling 1.74% to $ 19,656.85 as soon as inflation data was published.
