Markets closed down significantly on Friday and have started this week poorly.

US stocks entered a bear market, Treasury yields spiked to levels not seen in a decade and the Dollar rallied as the fallout from a hot inflation reading continued to rattle global trading already shaken by worries the Federal Reserve will plunge the economy into a recession.

The S&P500 was down -2.9% on Friday and Asian markets have been weaker overnight, with the Nikkei down -3.0% and the Hang Seng down -3.5%.

In Europe the STOXX 600 is down -1.5% and the FTSE 350 down -1.2%.

Commodities are also lower with oil, gold and industrial metals all softer and in the digital space, Bitcoin has hit the lowest level in 18 months.

The catalyst for these weaker markets was economic data released in the US on Friday and nervousness ahead of this week’s FOMC meeting.

The highest inflation in a generation, stoked by supply chain and commodity market disruptions amid China’s Covid struggles and the war in Ukraine, is roiling the outlook.

May CPI inflation was +8.6% year-on-year, while core CPI was +6.0% year-on-year.

Adding to bearish sentiment, the University of Michigan’s preliminary June sentiment index fell from 58.4 in May to 50.2, well below consensus expectations of 58.0 and indicating that inflation and high gasoline prices are now having a severe impact on consumer confidence.

This week is a big week for central bank policy: The Fed is expected to hike by 50 bps on Wednesday and the Bank of England is set to hike interest rates by 25 bps on Thursday.

The damage in the highly speculative crypto market took on staggering contours as the value of all assets sank below $1trillion, down by two-thirds from the heady levels reached in November. Bitcoin and its cousins have largely tracked risk assets, but the latest leg down — as much as 17% for the world’s largest digital token — came with concern that the freezing of withdrawals at the Celsius lending platform might indicate systemic risk in the crypto world that could accelerate the meltdown.

The China COVID reopening momentum is also under a cloud. Authorities are battling a renewed rise in daily infections in both Beijing and Shanghai and this threatens the pace of re-opening and potentially worsens global supply chain risks, which had (tentatively) started to see a little easing in certain areas.


  • S&P 500 futures rose 1.30% Tuesday morning. The S&P 500 fell 3.90%
  • Nasdaq 100 futures climbed 1.70%. The Nasdaq 100 fell 4.60%
  • Japan’s Topix Index dropped 1.10%
  • South Korea’s Kospi Index shed 0.50%
  • Australia’s S&P/ASX 200 Index fell 3.90%
  • Hong Kong’s Hang Seng Index slid 0.10%
  • China’s Shanghai Composite Index fell 0.50%
  • Euro Stoxx 50 futures rose 1.00%


  • The Bloomberg Dollar Spot Index slipped 0.30%
  • The Euro was at $1.0438, up 0.30%
  • The Japanese Yen was at 134.61 per Dollar, down 0.10%
  • The offshore Yuan added 0.70% to 6.7391 per Dollar


  • The yield on 10-year Treasuries fell five basis points to 3.31%
  • Australia’s 10-year bond yield jumped 27 basis points to 3.94%


  • West Texas Intermediate Crude was at $121.42 a barrel, up 0.40%
  • Gold was at $1,827.61 an ounce, up 0.50%

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