Now, market participants expect the central bank to hike rates by more than 0.75% during the meeting later this month
Wall Street stocks slipped overnight after fresh economic data out of the United States showed that inflation hit another 41-year high last month, adding to worries about more aggressive policy tightening by the Fed. The CPI rose 9.1% on a yearly basis, exceeding both the previous estimate of 8.6% and the expected 8.8% print. Now, market participants expect the central bank to hike rates by more than 0.75% during the meeting later this month. As such, the Dow Jones Industrial Average dropped 0.67%, the S&P 500 fell 0.45% and the Nasdaq Composite shed 0.15%.
Asian equity markets were mixed-to-higher on Thursday despite rising inflation expectations across the globe. Tokyo’s Nikkei 225 advanced 0.62%. Sydney’s S&P/ASX 200 added 0.44% after the data showed employment jumped much more than expected while jobless rate declined dramatically last month. On the negative side, the Shanghai Composite Index in China finished slightly lower, shedding less that 0.1%, while the Hang Seng in Hong Kong gave up 0.22%.
In Europe, stocks opened slightly lower, with the pan-European Stoxx 600 index shedding 0.3% in early deals as investors continue to react to hotter-than-expected US inflation data. Later today, the European Commission is set to announce new economic forecasts which could add to a downbeat tone among regional investors should the report reveal rising economic risks.
Meanwhile, the US dollar remains elevated, clinging to the upper end of the trading range as Fed rate hike bets continue to boost the currency. The USD index rallied to fresh two-decade highs around 108.60 earlier on Thursday before retreating marginally in recent trading. The dominating risk-off tone in the global financial markets adds to dollar’s strength due to its safe-haven status. The next upside target for the greenback arrives at 109.00. EURUSD keeps oscillating around the parity level after yesterday’s failed attempt to settle above the 1.0100 mark.