Inflation fears put pressure on Asian stocks

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The dollar rose to an almost 16-month high after a surge in US consumer prices

A man wearing a protective mask walks past an electronic board displaying Japan’s Nikkei index outside a brokerage in Tokyo, Japan, on September 21 2021. Picture: REUTERS/KIM KYUNG-HOON

Regional bond yields tracked a surge in US treasury yields overnight, when the US benchmark 10-year yield leapt by the most since February. At the same time, US real yields, which take inflation into account, dipped to record lows.“The inflation numbers surprised on the upside, and they may not even be the peak,” said ING economist Rob Carnell.

Futures signalled a subdued start for Europe, with Euro Stoxx 50 futures down 0.33% and FTSE futures about flat. The US consumer price index surged 6.2% on an annual basis, with petrol leading a broad-based increase, adding to signs that inflation could stay uncomfortably high well into 2022. “Supply constraints may well turn out to be transitory, but the rise in core drivers increases the pressure on the Fed to trigger a monetary policy response.”Benchmark 10-year treasury yields jumped the most in seven weeks to as high as 1.592% on Wednesday. The treasury market is closed globally on Thursday for a US holiday.

 

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