Global Shares Hold Up On The Inflation Data Release

Global Shares Hold Up On The Inflation Data Release

European stocks rose again on Wednesday, although bond yields remained below recent highs ahead of US inflation data that will indicate how quickly the Federal Reserve will increase rates.

Before the release of the much-awaited datapoint that could imply rising inflation in the world’s largest economy is peaking, Asian markets pushed up from near two-year lows, while Wall Street futures also climbed.

The current issue is that the market believes the Fed is committed to fighting inflation; therefore, it is ready to accept more market volatility and demand destruction than in the past.

Concerns about a slowing economy, compounded by China’s recent viral lockdowns, slowed a downtrend in treasury securities that saw 10-year US benchmark yields rise above 3% this month.

It’s an unanchored market in which no one knows where yields will go. In terms of market concerns, the growth side is increasingly prominent. The consumer price index in the United States is expected to reflect a significant slowdown in monthly rise.

In European trading hours before the data, US Treasuries fell. The dollar has been strengthened this year by bets on aggressive Fed tightening.

Oil recovered after falling over 10% in the previous two days, boosted by supply fears as the European Union seeks to secure support for a Russian oil ban and as big producers cautioned they might battle to fill the gap if demand increases. Brent increased by 2.6 percent.

Panasonic Corp anticipated flat operating profits for the current fiscal year on Wednesday, citing component shortages due to COVID-19 lockdowns in China and growing material costs as a risk to earnings.

These effects will be seen across the Japanese conglomerate’s industrial groups, including in its energy sector, which manufactures batteries for Tesla (TSLA) Inc, as the American electric vehicle maker urges it to speed up production plans for a new powerpack.

Panasonic also mentioned the possibility of supplier factory lockdowns as a result of COVID-19 and the international landscape. Lockdowns in Shanghai are expected to have an impact starting in June.

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