By Geoffrey Smith
Investing.com – Energy Prices Fuel Inflation Concerns, and Inflation Concerns Fuel Interest Rate Hikes and Falling Stock Markets. The pattern was established overnight in Europe and is expected to continue when the US markets open. ADP will release its private sector recruitment report two days before September’s main official labor market report. Constellation Brands (NYSE 🙂 reports revenue and Warby Parker has a lot to offer after a strong debut. You need to know that on Wednesday in the financial markets. October 6th.
1. Inflation worries in Europe are driving yields up and stocks falling
Fears of stagflation swept through European bond and equity markets overnight as prices for and power hit new highs. The benchmark bond yield rose to -0.16%, its highest level since May, while it rose to 1.13%, its highest level in more than two years.
British natural gas prices reached a new all-time high of 330 pence per Therm or the equivalent of around 97 euros per megawatt hour, as the scramble for energy supply at the beginning of the heating season in the northern hemisphere never ended.
The economy, meanwhile, showed signs of a sharp slowdown, down 7.7% from the previous month in August, mainly due to the.
Russia, which is still awaiting approval from European regulators to channel gas through the new Nord Stream 2 pipeline, continued to play hard, with a Kremlin spokesman again blaming European politicians for the shortage.
2. ADP warm-up for the employment report
In the US, too, government bond yields rose amid continued uncertainty over the debt ceiling debate and fears that higher global energy prices would also feed through to US inflation.
European and Chinese demand for liquefied natural gas exports continues to wreak havoc on US benchmark prices, which rose another 0.9% overnight to $ 6.369 per mm Btu. They have more than tripled in the last year.
The economic focus will later be on the report, which is expected to show an acceleration in hires to 428,000 last month from 374,000 in August.
3. Stocks will give up their Tuesday gains upon opening
US stocks will collapse again at the opening under renewed pressure from rising energy prices. The benchmark Treasury yield rose as high as 1.57% overnight before stabilizing a little lower at 1.54% at 6:15 a.m. ET.
fell 349 points, or 1.0%, which set the spot index on its way to losing all of its Tuesday gains and more when the market opens. were also down 1.2%, undoing all gains from the previous session, and were down 1.4%.
Among the stocks likely to be in focus is Facebook (NASDAQ :), which remains under pressure after critical comments from congressmen and women on Tuesday in response to testimony from whistleblower Frances Haugen. Another focus will be Warby Parker (NYSE :), which rose sharply when it made its market debut on Tuesday. Brewer reports income.
4. Rising interest rates around the world
The global monetary tightening cycle continued overnight as the key rate was raised by 25 basis points to 0.5%, citing inflationary pressures.
followed suit and raised the key interest rate from 1.25% to 1.50%.
That leaves, whose national bank is also under pressure to raise interest rates for the first time since the pandemic, when their political council meets later on Wednesday. Hungary, the Czech Republic and Romania have all tightened their monetary policies in the past few days, while the euro is up 0.7% against the euro as the NBP was expected to follow suit despite its apparent reluctance.
In the cryptocurrency space, it held up over $ 50,000, but alt-coins came under renewed pressure.
5. Oil hits new highs, focus on EIA inventory data
Crude oil prices soared to new highs, still buoyed by the perception that OPEC and its allies have put the world out of fuel shortages for the next few months by refusing to accelerate production increases.
That perception continues despite a second consecutive weekly surge in inventory, albeit a smaller one of less than 1 million barrels, according to the. These are due at 10:30 a.m. ET as usual.
At 6:30 a.m. ET, US crude oil prices were at $ 78.55 a barrel while futures rose 1.2% to $ 82.23 a barrel.