Oil and other commodity prices continued to soar while global stocks remained in decline due to Western power restrictions that threatened the supply chain and put inflationary pressures on world economic growth.
Oil Leads Commodity Soar
Brent oil prices hit their highest level since 2008 at $ 139 a barrel while nickel rose 30%, gold reached $ 2,000 an ounce and wheat broke through a 14 -year high due to high demand during supply disruptions.
During the closing session, Brent oil was at $ 122.78 a barrel, up 3.95% and U.S. crude oil jumped $ 118.68 a barrel.
Moreover, European zone government bond yields fell due to a spike in energy prices even before talks on an oil ban on Russia were made.
It also adds to concerns about stagflation in the global economy where prices are seen to be higher while growth is weak.
Inflation -linked government bond yields such as Germany's 10 -year and 30 -year yields fell 16 basis points, hitting new lows of -2.531% and -2.407%.
The Stock Market Receives a Hard Blow
Based on the current situation, the US and European stock markets experienced declines, with MSCI’s worldwide stock gauge down 1.45%.
The Dow Jones Industrial average fell 349.45 points or 1.04%, the S&P 500 lost 49.72 points or 1.15%and the Nasdaq Composite was down 195.51 points or 1.47%.
The pan-European STOXX 600 index which bounced from a one-year low was down 0.60% during the trading session.
Shares in emerging markets lost 3% while MSCI’s broadest Asia-Pacific stock index closed 2.89% lower and Japan’s Nikkei was down 2.94%.
Meanwhile, the European Central Bank (ECB), which will hold a meeting this week, was seen putting pressure on Euro trading earlier in the week.
NAB economist Tapas Strickland said the ECB is likely to maintain maximum flexibility with an asset purchase program at 20 billion Euros during Q2 and beyond.
In Uncle Sam's country, investors are looking at a consumer price report to be released on Thursday, where they expect the US core inflation rate for February to rise 6.4% year -on -year from 6% in January.
Moreover, investors are of the view that the Federal Reserve (Fed) is likely to raise the rate by 25 basis points at its meeting in March.
The dollar index rose 0.182 on the back of strong US jobs reports.
