In Asian Equity Markets stocks were down while the U.S. dollar held strong on Tuesday, as Treasury yields spiked to a three year high ahead of U.S. inflation data which could foreshadow even more aggressive interest rate hikes from the Federal Reserve. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 percent. Australian shares were down 0.65 percent, while Japan’s Nikkei stock index slid 1.5 percent. Hong Kong’s Hang Seng Index gained 0.6 percent in early trade on Tuesday, while China’s bluechip CSI300 Index was up 0.4 percent.

In Currency Markets the dollar index was back above 100 on Tuesday morning, supported by high U.S. yields ahead of inflation data that is expected to show U.S. prices gained the most in over 16 years, reinforcing expectations of aggressive Fed tightening policy. The index stood at 100.11, testing last week’s near two-year high of 100.19. The euro was last at $1.087 little changed from its Friday close. Sterling inched lower to $1.30155. The Australian dollar was on the back foot at $0.7403, while the New Zealand dollar was also lower at $0.6807.

In US Equity Markets stocks closed sharply lower on Monday as investors started the holiday-shortened week in a risk-off mood, as rising bond yields weighed on market-leading growth stocks ahead of crucial inflation data. The Dow fell 1.19 percent, to 34,308.08, the S&P 500 lost 1.69 percent, to 4,412.53 and the Nasdaq Composite fell 2.18 percent, to 13,411.96. Media and streaming firm Warner Bros Discovery Inc, formed from the $43 billion merger of Discovery Inc and assets of AT&T Inc, whipsawed in its first day of trading, ending up 1.4 percent.

In Commodities Markets oil prices fell by $4 a barrel on Monday, with Brent tumbling below $100 on plans to release record volumes of crude from strategic reserves and on continuing COVID-19 lockdowns in China. U.S. crude futures fell $3.97 to settle at $94.29 a barrel while Brent settled down $4.30 at $98.48. Spot gold was up 0.1 percent at $1,947.80 per ounce after hitting its highest since March 14 at $1,968.91. Spot silver rose 0.5 percent to $24.87 per ounce. Palladium was steady at $2,425.04 per ounce. Platinum fell 0.2 percent to $973.40.

In European Equity Markets stocks fell on Monday as rising bond yields hit technology shares and volatility gripped French blue-chip stocks on forecasts of a tight race between President Emmanuel Macron and far-right challenger Marine Le Pen in the final round of the election. The pan-European STOXX 600 index fell 0.6 percent, led by a 2.2 percent slide in technology stocks. Germany’s DAX fell 0.6 percent and the UK’s FTSE 100 fell 0.7 percent. Societe Generale jumped 5.0 percent after it agreed to sell its stake in Rosbank and the Russian lender’s insurance subsidiaries.

In Bond Markets the benchmark 10-year U.S. Treasury yield rose on Monday to its highest level in more than three years as investors awaited key inflation data later this week to determine how hawkish the Federal Reserve will need to be on its policy path. The yield on 10-year Treasury notes was up 3.8 basis points to 2.753 percent after climbing to 2.784 percent, its highest level since January 2019. The yield on the 30-year Treasury bond was up 5.1 basis points to 2.797 percent after touching 2.803 percent, its highest since May 2019. The two-year U.S. Treasury yield was up 0.2 basis points at 2.522 percent.

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