Global bonds, stocks fall as inflation fears mount
BNN Bloomberg
Global bond yields rose and most stocks fell on Monday as surging energy prices cemented worries about inflation and reinforced bets on policy tightening.
Global bond yields rose and most stocks fell on Monday as surging energy prices cemented worries about inflation and reinforced bets on policy tightening.
U.S. index futures fell, with Apple Inc. among the biggest pre-market declines, while Tesla Inc. advanced with crypto and mining stocks. Consumer and retail shares led a drop in Europe’s Stoxx 600, with luxury companies slipping on concerns about Chinese tax legislation. Shares in Asia were mixed as China’s economy slowed in the third quarter.
The global bond selloff gathered pace, with U.K. yields surging after Bank of England Governor Andrew Bailey warned on the need to respond to price pressures. Rate-hike bets have also picked up in the U.S., Australia and New Zealand, where inflation accelerated to the fastest pace in 10 years. Ten-year Treasury yields climbed and the dollar was steady.
Oil prices built on their eighth weekly gain, with West Texas Intermediate crude rising to the highest since 2014. Brent approached US$86 a barrel. OPEC and its allies once again failed to pump enough oil to meet their output targets, exacerbating the supply deficit, while Russia is keeping a tight grip on Europe’s energy market.
Base metals traded near record highs, following recent surges in copper and aluminum as a global energy crisis deepens the supply crunch and adds to inflation worries.
Investors continue to grapple with worries that energy shortages and supply-chain disruptions will drive up living costs in most economies. At the same time, the recovery remains patchy and central bankers are inching closer to paring back stimulus. U.S. consumer sentiment fell unexpectedly in early October, but retail sales advanced.
