In Asian Equity Markets stocks fell to an almost two-year low and the dollar hit its highest in two decades on Thursday as data showed U.S. inflation persistently hot, deepening investor worries about the economic toll of aggressive interest rate hikes to tame it. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 2.3 percent to a 22-month low. Japan’s Nikkei fell 1.8 percent. Hong Kong’s Hang Seng Tech index slid 1.5 percent on Thursday and is off more than 30 percent this year. In Australia, the S&P/ASX 200 was down 0.56 percent. South Korea’s KOSPI fell 0.34 percent.
In Currency Markets the dollar hit a two-decade high on Thursday after U.S. inflation moderated less than markets had expected, keeping the Federal Reserve on course to tighten policy aggressively. The dollar index, which measures the buck against six major peers, added about 0.1 percent to 104.22, hitting its highest since December 2002. Japan’s currency added about 0.2 percent to 129.67 per dollar. Sterling fell to $1.2211 on Thursday for the first time in almost two years. The Aussie lost 0.76 percent to $0.6885. New Zealand’s kiwi fell 0.79 percent to $0.6240, also an almost two-year low.
In US Equity Markets stocks ended sharply lower on Wednesday, with the Nasdaq falling more than 3 percent and the Dow falling for a fifth straight day after U.S. inflation data did little to ease investor worries over the outlook for interest rates and the economy. The Dow fell 1.02 percent, to 31,834.11, the S&P 500 lost 1.65 percent, to 3,935.18 and the Nasdaq Composite fell 3.18 percent, to 11,364.24. Energy shares ended higher and helped to limit some of the declines in the S&P 500 and Dow. Exxon Mobil Corp shares were up 2.1 percent.
In Commodities Markets oil prices rose more than 5 percent on Wednesday after flows of Russian gas to Europe fell and Russia sanctioned some European gas companies, adding to uncertainty in world energy markets. Brent crude settled up 4.9 percent, to $107.51 a barrel, while U.S. West Texas Intermediate crude climbed $5.95 a barrel to $105.71, a 6 percent increase. Spot gold was up 0.8 percent at $1,852.65 per ounce. Spot silver gained 1.6 percent to $21.58 per ounce, platinum climbed 3.7 percent to $999.33, while palladium eased 1 percent to $2,044.17.
In European Equity Markets stocks locked in gains for a second straight session on Wednesday as strong earnings and a surge in economically sensitive sectors boosted sentiment after U.S. inflation growth slowed sharply in April. The continent-wide STOXX 600 index rose 1.7 percent, registering its biggest one-day percentage gain since late March. German conglomerate Thyssenkrupp rose 11.2 percent after it raised its outlook for sales and operating profit for 2022, while British catering company Compass Group climbed 7.4 percent on lifting its annual revenue forecast.
In Bond Markets U.S. Treasury yields rose in line with those of European government bonds on Thursday, with two-year yields hitting their highest in three years, after hawkish comments from an ECB official and as investors prepare for aggressive Federal Reserve rate hikes. Ten-year Treasury yields were last 2.882 percent. They reached a high of 2.981 percent on Wednesday, the highest since Dec. 2018. Two-year yields, which are highly sensitive to interest rates, reached 2.674 percent on Thursday, also the highest since Dec. 2018, before falling back to 2.661 percent.