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Inflation, Slow Economic Growth: US Dollar, Stocks Fall

In stock market news today, US equity futures slipped, and Asian stocks lost out on gains. The drop reflects the declining economic growth and persisting inflation that continue to affect markets. In the meantime, the US is closed due to Independence Day celebrations.

Asian shares rose but not close to session highs, S&P 500 and Nasdaq 100 contracts fell as European futures went up. Sovereign debt remains on a rally as investors are reconsidering how high central banks can raise interest rate hikes to curb inflation amid slow economic growth. Bonds went up in New Zealand and Australia while Treasury futures showed little change due to the US federal holiday.

US Dollar & Oil Slip

The US dollar & oil prices fell on Monday morning in Asia as economic growth concerns continue to loom over markets. For oil, fears of an economic slowdown outweighed the tight supply of the commodity as OPEC fails to meet the approximate 275,000 barrel per day increase they announced.

Gold Climbs on US Dollar’s Back

In gold price news, gold was trading higher on Monday morning in Asia as the US dollar fell on account of rising economic growth concerns. The inverse relationship to the US dollar and the US 10-year Treasury yield falling to its lowest level in one month on Friday offered the shiny metal support.

Evident Economic Weakness

Signs of economic weakness are starting to be more noticeable across all sectors. US consumer sentiment for June fell to a record low. Investors are not exclusively worried about the pressures increasing prices are causing but they are also concerned about the possibility of a recession and its implications.

US Federal Reserve Chair Jerome Powell restated last week that the Fed is planning to tame high inflation. The statement came after the Fed hiked interest rates by 75 basis points. Investors are expecting the release of Fed’s June meeting minutes, due this Wednesday.

China Continues to Fight Covid-19

In China, officials are working toward fighting off a Covid-19 outbreak in provinces close to Shanghai. Beijing is planning to fight off the virus with mass testing and lockdowns.

In the meantime, developer Shimao Group Holdings Ltd. didn’t manage to pay a $1 billion dollar note that matured on Sunday. This is one of the greatest dollar payment failures so far in China.

What to watch out for this week:

Tuesday
Australia Rate Decision
Euro Area PMIs
China PMI
India PMI
US Factory Orders
US Durable Goods

Wednesday
FOMC minutes
US PMIs
US ISM services
US JOLTS job openings

Thursday
EIA crude oil inventory report
ECB Monetary Policy Meeting Accounts

Friday
US Private Nonfarm Payrolls (NFP)