LONDON – European stocks fell to two-month lows on Friday after slides in Asia and Wall Street, with euro zone inflation data expected to hit 13-year highs, prompting investors to spur prices. There is a possibility of stammering together.
On the first day of October, for some of the most notorious market routes in history, the STOXX index of 600 companies fell 0.9 percent, reaching its weakest level since mid-July.
The worldwide gauge of MSCI shares fell 0.4 per cent, with US stock futures pointing to a further decline.
Michael Hewson, Chief Market Analyst at CMC Markets, said that with the spectacular economic growth data now in the rear-view mirror, the markets were looking ugly in October.
Overnight data showed Asia’s manufacturing activity largely stabilized in September as signs of slowing Chinese growth weighed on the region’s economies.
“There is a feeling that with October’s reputation, concerns about rising energy prices, supply chain disruptions, inflation and electricity shortages, October could be quite a windy affair,” Hewson said.
Flash estimates for headline euro zone inflation are due 0900 GMT, with UniCredit expecting year-on-year to rise to 3.3 percent, its highest level since 2008.
“We expect headline inflation to approach 4 percent in November,” Unicredit analysts said in a note.
US stock futures pointed to a 0.60 percent drop for the S&P 500 after the index fell 1.19 percent overnight in its worst month since March of last year.
However, the dollar started the final quarter of 2021 near its highest level of the year, and is headed for its best week since June as currency markets brace for US interest rates to rise ahead of key peers. .
The dollar index, which measures the currency against six major rivals, was off Thursday’s one-year high of 94.504, having previously changed hands at 94.287. Meanwhile, the benchmark 10-year US Treasury yield stood at 1.5013 per cent.
In Asia, Japan’s Nikkei fell 2.3 percent to its lowest level since September 3. An MSCI index of Asia-Pacific shares fell 1.22 per cent to its lowest level since August 24.
Chinese markets are closed for a week from Friday on account of the Golden Week holiday.
Debate continued as to whether rising inflation coupled with weak growth was a recipe for stagflation.
Federal Reserve Chairman Jerome Powell said Wednesday that resolving the “tension” between high inflation and high unemployment is the Fed’s most urgent issue, acknowledging a potential conflict between the US central bank’s two goals of stable prices and full employment. Is.
The latest clues on the Fed’s policy normalization path come with US personal spending and core consumption deflator data later in the day.
Crude oil prices continued to fall after Brent hit $80 a barrel for the first time in three years.
Brent crude futures slipped 0.5 per cent to $77.92 from Thursday, while US crude futures fell 0.6 per cent to $74.57.
Despite traditionally being an inflation hedge and safe haven, gold fell 0.26 per cent to $1,752 an ounce after rising 1.77 per cent on Thursday, its biggest since March.
by hoo jones
This News Originally From – The Epoch Times