The hardest inflation data recorded in the USA since 1990 continues to affect the global markets.
After the highest inflation data in 31 years in the USA, the expectations that the Fed could accelerate the reduction in asset purchases and bring forward interest rate hikes were the main factor affecting pricing in global markets.
On Wednesday, when the data was announced, the S&P 500 index fell by 0.82 percent, the hardest in a month. While 8 of the 11 leading industrial groups traded in the S&P 500 fell, the energy and information technologies sectors led this movement. The Nasdaq 100 index also ended the day with losses of 1.44%.
The rise in bond yields was also influential in both the decline in the Stock Exchanges and the higher yield in the US Treasury’s 30-year bond auction. Markets began to realize the fact that inflation in the USA could be more permanent.
While the US 10-year bond yield increased by 11 basis points to 1.55% yesterday, the bond market in the country is closed today due to Veterans’ Day.
Surprise in Oil Stocks
U.S. crude inventories rose by an unexpected 1 million barrels last week, according to data released by the Energy Information Administration (EIA) on Wednesday evening. On Tuesday, the American Petroleum Institute (API) announced a decrease of 2.5 million barrels for the same period. On the other hand, in the oil markets, it is also discussed how the Biden administration will intervene the rising prices. While prices rose to the highest level in 7 months last month, they also increased gasoline prices, escalating inflation concerns in the country.
