Global market update: Concerns over inflation are weighing on Wall Street and the European Stoxx 600

 Global market update: Concerns over inflation are weighing on Wall Street and the European Stoxx 600

Global market update: The US stock market is feeling the heat of US inflation fears after a brutal day in the Asian stock market. The Dow Jones index increased by 0.12%, the S&P 500 index declined by 0.50%, and the tech-heavy Nasdaq fell by 1.23% on Friday. While MSCI's broadest index of global shares sank 0.3%, the European Stoxx 600 index plunged 0.98 percent.

The MSCI index of shares outside of Japan lost 1.2% and stayed in negative territory for the year as markets in Asia struggled with concerns about rising dollar borrowing rates and a downturn in China's growth.

According to data released on Friday, China's consumer prices were unchanged in September but factory-gate costs declined more slowly, suggesting that deflationary tendencies are still there. Japan's Nikkei fell by 0.53%.

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Ryan Brandham, Head of Global Capital Markets, North America at Validus Risk Management, highlighted the cause of the decline in global stock markets and stated, "The hawks calling for at least another (Fed) hike will be supported based on these numbers."

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According to Ray Attrill, head of FX strategy at National Australia Bank, "much of with their efforts done in the past week in the manner of bull flattening of the US yield curve was partially destroyed by the latest U.S. CPI report."

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Indicators carefully studied by analysts for indications that above-target inflation has been ingrained in the economy include the unexpected jump in rental costs, which were revealed in data released on Thursday.

In December, there is approximately a 40% likelihood of a rate increase in the US, up from around a 28% possibility before Thursday's consumer price data.

Later on Friday, inflation statistics are expected from Sweden, Spain, and France.

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Treasury rates increased on Thursday as a result of the US inflation data as well as little demand for a sale of 30-year US notes.

The Middle East tensions' rapid rise this week assured that markets are still in a cautious mindset. Josep Borrell, the head of foreign affairs for the European Union, urged cooperation between China, the United States, and Europe in a speech he gave in Beijing on Friday. Israel's foreign ministry said that it was "deeply disappointed" that China had not yet denounced the Hamas assaults from the previous weekend.

The currency market reflected the risk-off sentiment, with the dollar retaining the majority of overnight gains. The dollar decreased by 0.07% to 106.40 against a basket of currencies after increasing by 0.8% overnight.