Stocks Up; Dollar Squeezed as Inflation Pulls Forward Rate Hike Bets

Stocks Up; Dollar Squeezed as Inflation Pulls Forward Rate Hike Bets

The stock market prices of Asia have surged considerably, the value of the has dollar eased, and the bonds of longer dates rose on Thursday. Investors are of the opinion that it is Inflation that is causing the forward rate hike around the world. The shares of Nikkei, Japan climbed in price by 1% while the broadest index of the shares of the APAC region (MSCI) surged by 0.4%. The shares of the Shanghai Composite increased by a soft margin while the markets of Hong Kong remained closed for the day. The stock market statistics changed overnight to reflect a significant increase in the consumer prices of the United States. However, the policy makers of the Federal Reserve are getting increasingly concerned about Inflation and are currently focusing on curbing the purchase of assets. 

In response to the policy makers’ discussion, traders had expectations in rate hike while decreasing the projected peaks. The futures of Fed Funds pulled forward, and it is expected that the rates will be around 1.5% within the next five years. The stock prices of gold witnessed the best hikes ever. The short term yields of the Treasury increased in the bond market whereas the long term yields of the Treasury dropped thereby flattening the stock market curve. 

On Wall Street, the stock price of the S&P 500 increased by 0.3% and in the Asia-Pacific region, the futures of S&P 500 increased by 0.3%. On Wednesday, the consumer prices in the US increased by 5.4% on a yearly basis. There was a substantial increase in stock prices in the Energy Sector of the US, thereby raising the risk of price pressure. The currency market is stable as of now after the overnight plunge in the value of the dollar. The price of oil futures has become steady.


Sylvia Davis is the FinanceLong columnist and news editor for the financial stories. She curates column and regularly contributes financial news updates. Before joining our team, she worked as a news writer for the foremost publications.

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