In Asian Equity Markets stocks fell and the safe-haven dollar held firm on Tuesday, as a global energy crunch fueled inflation fears, clouding investor sentiment before the U.S. corporate earnings season. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.9 percent in early trade. Australian shares lost 0.29 percent while Japan’s Nikkei stock index slid 1.03 percent. The broader Topix lost 0.65 percent to 1,983.59. China’s blue-chip CSI300 index was 0.75 percent lower, while the Hong Kong’s Hang Seng index opened down 1.35 percent.
In Currency Markets the yen hit a fresh three-year low on Tuesday, before steadying as traders doubled down on expectations U.S. rates will rise well ahead of peers, while assuming the Bank of Japan would be among the last major central banks to raise rates. A day after its worst session against the dollar in five months, the yen fell further to 113.49 per dollar in early trade. The euro however stayed pinned near its lowest levels in a year, fetching $1.1559. The Aussie dollar stayed firm at $0.7342, a day after hitting a month high. The dollar index was at 94.33.
In US Equity Markets stocks ended a choppy session lower on Monday as investors grew nervous ahead of third-quarter earnings reporting season. The Dow fell 0.72 percent, to 34,496.06, the S&P 500 lost 0.69 percent, to 4,361.19 and the Nasdaq Composite fell 0.64 percent, to 14,486.20. Among individual stocks, Southwest Airlines Co fell 4.2 percent on a report that it canceled at least 30 percent of scheduled flights on Sunday. Visa Inc. was down 2.2 percent and Mastercard Inc also fell 2.2 percent among the biggest drags on the S&P 500.
In Commodities Markets gold prices edged lower on Monday, weighed by a rallying dollar on bets the U.S. Fed would not put off stimulus tapering, although stagflation expectations limited losses in inflation-hedge bullion. Spot gold was 0.1 percent lower at $1,754.54 per ounce. Spot silver fell 0.3 percent to $22.60 per ounce. Palladium advanced 1.6 percent to $2,110.93 per ounce, while platinum was last down 1.8 percent, to $1,008.17. Brent crude rose 1.5 percent to $83.65 a barrel, while U.S. West Texas Intermediate crude also added 1.5 percent to finish at $80.52.
In European Equity Markets a strong rally in mining stocks on Monday boosted an index of European equities, which retraced all losses logged early in the session on worries about inflation and the upcoming earnings season. Europe’s mining sector rose 3 percent to post its biggest daily gain in three months as iron ore and coking coal rallied on supply fears, while base metals prices jumped on concerns about rising cost of energy and raw materials. The pan-European STOXX 600 index recouped losses of as much as 0.6 percent on the day, to end marginally higher.
In Bond Markets a selloff in European bond markets gathered pace on Monday, with German debt yields rising to their highest since May while money markets moved to fully price in a European Central Bank rate hike by the end of 2022. Germany’s benchmark 10-year Bund yield rose 2.5 basis points to -0.108 percent, its highest since May. Gilt yields rose more than 5 basis points, dragging up euro zone bond yields. Switzerland’s 10-year bond yield rose to its highest since late 2018 at around -0.051 percent.