Bonds tremble as inflation hits new records - SABC News - Breaking news, special reports, world, business, sport coverage of all South African current events. Africa's news leader.

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Stocks steadied in Asia on Wednesday as Shanghai emerged blinking from two months of lockdown and a dip in oil prices dangled the prospect of a respite from rising energy prices, but nerves about inflation kept investors and bond markets on edge.

Soaring food and energy costs drove euro-zone inflation to a record-high 8.1% in May, overnight data showed, beating market expectations and stoking concern about rate rises not just in Europe but globally.Benchmark 10-year Treasury yields rose 10 basis points and were up a further 2.5 bps to 2.8749% early in the Asia session.S&P 500 futures bounced 0.5% after the index slid 0.6% on Tuesday.

The US Federal Reserve begins shrinking assets holdings built up during the pandemic on Wednesday and traders expect it will raise rates by 50 bps at meetings this month and next. “The more the markets focus on the inflation data and central bank action, the more likely it is that we have a bumpy start to the summer in risk sentiment and a strong one for the dollar.”

Australian economic growth slowed in the first quarter, data showed on Wednesday, but domestic demand helped it come in a bit better than expected, setting the scene for more hikes in interest rates.A little relief from an overnight pullback in oil prices and hope that China’s slowdown might be nearing its nadir have helped to check investors’ worries. Following two months of frustration, despair and economic loss, a draconian lockdown of Shanghai’s 25 million residents ended at midnight.

 

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