Following the surge in the US dollar’s value along with rising inflation the stock markets are all around facing the obvious situations of experiencing lows
The correlation of the US Dollar with Stocks and bonds is quite evident, which is known to everyone; whenever the former shows fluctuations, the latter experiences quite a hit. Recently something similar happened when stock and bonds in the Asian market experienced on Wednesday; investors got worried about inflation and expectations of a hit contained with it due to the rise in the US dollar’s price. There is skepticism that the continuation of the same would bring global growth slightly down.
The overall situation of the markets in terms of the US dollar showed more or less similar pictures; however, some of them have also seen slight growth. Index broadcasts Asia-Pacific shares other than Japan, MSCI was down by 1.30%, while the Hang Seng Index of Hong Kong dropped by 0.56% in the last 24 hours. The one that recorded a slight rise was the Nikkei index of Japan, which rose by 0.65% in a day.
After recovering from a two month-long lockdown, the Shanghai stock market index SSE Composite Index is recovering after seeing steep falls experienced by factory activity all over Asia. S&P 500 futures are slightly up by 0.13%, while Euro STOXX 50 futures have surged by about 0.05%, and FTSE futures are also somewhere around 0.02%.
May month has seen eurozone inflation to its record high of 8.1% after soaring food and energy costs while fueling concerns about hikes in rates not just in Europe but all over the world. Analyst at a French Investment Company Societe Generale, Kit Juckes said that markets are seeing the expectations of price hikes for June month from all over the major regions, including the United States, Britain, Sweden, Canada, and Australia.
Analysts further explained that the more the market would focus on the data on inflation and actions performed by the Central Bank, the more likely the market would give investors a bumpy ride from the start of this summer with risk sentiment and a strong period for the Dollar.
The Dollar has been strong against the Japanese Yen where it is about 129.39 in the Asian session, while in terms of the Australian Dollar, it costs 1.39 Aussie for one Dollar. For Yuan, it is 6.69, while for Euro and Sterling, it is 1.07 and 1.26, respectively.
Source: https://www.thecoinrepublic.com/2022/06/01/inflation-is-breaking-highs-while-the-dollar-surges-making-the-global-stock-market-struggle/