The United States (US) and European equity markets eased on the prospect of rising interest rates, while bond yields rose after European zone Gross Domestic Product (GDP) data readings exceeded expectations.
Shares moved weakly with investors awaiting the European Central Bank (ECB) meeting today and as well as US consumer price data on Friday.
News from the White House that it expects key inflation figures to be ‘raised’ sparked concerns that the central bank would further tighten policy, further slowing economic growth.
This expectation was further strengthened by news of retail giant, Target which lowered its profit margin projection after experiencing a sharp drop in quarterly profit in May.
As a result, the Dow Jones Industrial average index fell 0.81%, the S&P 500 lost 1.08%and the Nasdaq Composite was down 0.73%.
The pan-European STOXX 600 index was down 0.57% while the MSCI benchmark of worldwide stocks fell 0.56%.
Asian market stocks strengthened overnight with Chinese equities gaining some momentum but sentiment of uncertainty in Europe kept them open weak.
Meanwhile, stronger -than -expected European zone economic data for the first quarter of this year has pushed bond yields up.
Treasury Notes 10 -year yield rose 6.6 basis points at 3.036% while Germany’s 10 -year yield jumped to a new high since 2014 at 1.368%.
It indirectly signals that the ECB will raise interest rates higher by up to 75 basis points by September.
The currency summary showed the US dollar rising to a new 20 -year high against the Yen which weakened 134.47 per dollar while the Euro hit 0.12% at $ 1.0712.
As for commodities, U.S. crude futures rose $ 2.70 at $ 122.22 a barrel while Brent oil added $ 3.01 at $ 123.58 a barrel as China began easing sanctions and an oil workers strike in Norway.
Gold, on the other hand, took advantage of the volatility of trading movements with US gold futures reaching 0.2% at $ 1,856.50.
Bitcoin was down 3.11% at $ 30,147.80.
