Global Markets Fall, Stirred by US Inflation and Rate Adjustment Fears

Global markets tumbled on Monday with the dollar hitting a two-decade high as high inflation data from the US fueled concerns that central banks will raise rates further. At 5:20 a.m. ET, USA. dow jones futures fell 1.9 percent, while S&P 500 futures fell about 2.3 percent. Nasdaq futures fell 2.9 percent. The US consumer price index accelerated 8.6 percent last month, strengthening the possibility that the Federal Reserve may take an aggressive approach to reining in price increases. The weight of the decline was heaviest in Asia, where Japan’s Nikkei fell 3 percent and the yen plunged to the weakest level in more than 20 years. It has fallen sharply in recent months due to a strong dollar and very loose monetary policy in the East Asian nation. On Friday, Japan’s central bank and government issued a joint statement warning of a dramatic fall in the currency, implying possible meddling aimed at halting Tokyo’s slide. Aside from the yen, Asian currencies such as the Indian rupee also tumbled to a record low of 78.2 against the dollar in early trading. So did Hong Kong’s Hang Seng, which fell 3.4 percent, while South Korea’s Kospi fell 3.5 percent and China’s Shanghai Composite fell 0.9 percent. In Europe, France’s CAC 40 was down 2.5 percent in early trading, while Germany’s DAX 30 was 2.3 percent weaker. The FTSE 100 slowed 1.8 percent as sterling fell to $1.22 after new data revealed the UK economy shrank for the second consecutive quarter in April. “The hangover from Friday’s US CPI data is not helped by concerns that China will pull back on some of its economic reopening or more dire economic data out of the UK,” said Societe Generale strategist, Kit Juckes, in a research note. On Thursday, authorities in Beijing’s largest district, Chaoyang, declared the closure of entertainment centers days after allowing them to reopen, as the resurgence of Covid in the country appears to worsen. Read More Related News Here Let here it in the comment below if you do have an opinion on this; Global Markets Fall, Stirred by US Inflation and Rate Adjustment Fears