European stocks plummeted Thursday after a summit of aid in the previous quarter, aided by rising U.S. commodity prices than they feared, raised questions about how long it would take for prices to rise sharply.
The Stoxx 600 equity gauge fell 0.1%, ending Wednesday’s quarter by 0.6% above the 7% annual gains in U.S. consumer prices that investors have not fasted the Federal Reserve’s plan to remove monetary incentives during the epidemic. .
London’s FTSE 100 rose 0.8% on Wednesday.
Investors continue to expect the US central bank, whose financial decisions affect inflation and global market valuation, to increase its volume three or four times this year to about 1 percent, after shutting down almost zero since March 2020.
This positive outlook is based on the observation that inflation in the US, led by rising electricity prices and constraints in chains disrupted by coronavirus, will soon reach a climax.
“People love the comfort blanket of what feels like a mathematical assurance that a 7 percent risk will not go away,” said Sunil Krishnan, chief financial officer at Aviva Investors.
But this was preventing investors from “asking tough questions,” he added, noting that the amount of US money going down and the Fed’s ability to raise interest rates is higher than market expectations.
“If we look at the 3.5 per cent inflation rate by the end of the year, the Fed will still have more expensive firewood,” he said.
“CPI is expected to be poor which is why the incredible potential was so low,” added Deutsche Bank analyst Jim Reid. “Many forecasters think the risk of inflation is imminent, but the pace of the transition process is open to controversy.”
Wall Street stock markets soared after the inflation report before the end of Wednesday and immutable benefits. In Asia, Hong Kong’s Hong Kong index fell 0.1 percent on Thursday while the Nikkei 225 in Tokyo lost 1 percent.
Later on Thursday, economists interviewed by Reuters expected that US inflation figures would show producer prices, the volume of which businesses pay their sales, up 9.8 percent year-on-year until December.
Futures markets mean that the S&P 500 share index blue-chip and the top 100 shares in the Nasdaq Composite that look at technology can sell off in New York early.
Yields over the 10-year US Treasury note rose about 0.03 percent to 1.75 percent Thursday as the price of government debt fell.
The dollar index, which measures US currency against six others, fell below 0.3 percent after falling sharply since early November Thursday morning.
The euro added 0.3 percent against the dollar to $ 1.147. Although the European Central Bank has opposed interest rates hikes this year, the Fed’s rise in prices is so high in the markets that a growing dollar strength is not possible, Citi experts said.
“We are now approaching the peak of the Fed-hawkishness soon,” the Citi team said in a statement to customers. “Dangers are now very biased [euro]. ”
Brent crude, an oil brand, added 0.2 percent to $ 84.87 a barrel.
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