World stock indices fall ahead of US consumer price index, oil prices near multi-year highs
Global stock indexes stabilised near weekly lows amid inflation fears ahead of a US consumer price data release later on Wednesday, while economic recovery in many countries kept oil prices near multi-year highs. According to a Reuters poll, the September US consumer price index is expected to show a monthly increase of 0.3 per cent. Minutes from the US Federal Reserve's September policy meeting are also due to be released later, and JPMorgan will be the first major bank to report an unofficial start to the company's reporting season. " The markets are at a crossroads," said Giles Coghlan, chief currency analyst at HYCM. "Are we in a stagflationary environment - will we see low growth but high inflation? That is a concern." The MSCI World Stock Index was unchanged after falling in the previous three sessions. S&P futures fell 0.4% after the S&P 500 fell 0.2% overnight on volatile earnings. European stock indices were down 0.4% and nearly 5% below their August peak. UK stocks fell 0.4%. MSCI's broadest index of Asia-Pacific equities outside Japan rose slightly, rising 0.3% after falling more than 1% a day earlier, its worst daily performance in three weeks. Positive trade data from China, which showed that export growth unexpectedly accelerated in September, provided some relief to those worried about a slowdown in the world's second-largest economy. The data helped China's blue chips jump 1.2%, despite a continued decline in real estate shares. Japan's Nikkei fell 0.3% as high energy prices and a weak yen mean trouble for the country, which buys most of its oil abroad. The dollar fell 0.2% against the currency index after hitting a year high in the previous session amid growing expectations that the Fed will announce a reduction in stimulus next month with interest rates rising next year. Three US Federal Reserve officials said on Tuesday that the US economy had healed enough for the central bank to begin withdrawing its support during the crisis. The dollar stabilised at 113.58 yen after hitting a nearly three-year high against the Japanese currency on Tuesday. The euro rose 0.2 per cent to $1.1551. Indices and quotes as well as all the major and popular trading instruments are available for all to see on Thailand's Metatrader 4 Exness. Meanwhile, US ten-year Treasury bond yields stabilised at 1.5804% after hitting four-month highs on Tuesday. German 10-year bond yields were unchanged at -0.10% after rising to -0.085%, the highest level since late May. "Inflation is putting pressure," said Charles Diebel, head of fixed income at Mediolanum, pointing to heightened expectations of a UK rate hike. "People are concerned that the same will happen elsewhere, they fear inflation will be so persistent that central banks will be forced to respond." Oil prices fell slightly on inflation fears, although higher prices for power-generating fuels such as coal and natural gas limited losses. Brent crude remained steady at $83.40 a barrel, below Monday's three-year high of $84.60, while US crude fell slowly to $80.63, from Monday's seven-year high of $82.18. Gold, used as inflation protection, rose 0.3 per cent to $1,765 an ounce.
