US consumer price data added to expectations that the Fed could yet hike interest rates once more this year
US stocks fell on Thursday to end a four-day winning streak as Treasury yields resumed the ascent after fresh data showed that US inflation stayed elevated in September. According to the official data, the consumer price index increased 0.4% on the month and 3.7% from a year ago, exceeding expectations. As a result, the Dow Jones Industrial Average was lower by 0.51%, the S&P 500 declined by 0.62%, and the tech-heavy Nasdaq Composite lost 0.63%.
In Asia, equities slipped on Friday, also driven down by the reemerged pressure from rising bond yields. The Shanghai Composite index fell 0.64% after fresh data showed that China’s consumer prices in September remained unchanged compared to the same period last year, suggesting domestic demand stays weak. A separate report showed another drop in China’s exports and imports in September. The Hang Seng in Hong Kong slipped 2.35%, Japan’s Nikkei 225 index fell 0.6%, and Australia’s S&P/ASX 200 lost 0.56%.
Similarly, European stocks opened lower ahead of the weekend as investors digested heightened geopolitical tensions and fresh economic data out of China and the US. The US consumer price data added to expectations that the Federal Reserve could yet hike interest rates once more this year. In the US, stock index futures are now up marginally after yesterday’s losses in Wall Street. 10-year yields are lower by 5 bps to 4.658%, but the selling could yet hit during US trading.
In currencies, the USD index rallied on Thursday in the aftermath of a solid CPI report that fueled the December rate hike expectations. The greenback jumped back above 106.00 to find resistance around 106.60. Today, the upside pressure has eased as Treasury yields retreated marginally. Still, the dollar could see another rally after some hesitation, especially as risk aversion dominates global financial market. On the downside, the immediate support now arrives around 106.00, followed by the 105.70 zone.