Global stock prices fell to a 1.5-year low today dollar strengthened to the highest level in two decades, amid growing concerns that the rapid rise in inflation will lead to a sharp rise in interest rates and stagnation of the world economy.
These concerns, combined with war in Ukraine which continued to escalate, led to losses of more than 2% for major European stock markets, while the global MSCI stock index fell to its lowest level since the end of 2020 with a fall of almost 20% since the beginning of the year.
The Chinese yuan fell to a 19-month low, while the dollar strengthened to its highest level since late 2002.
Almost all volatility indicators emit risk signals. The bitcoin was trapped in the cryptocurrency sales climate at very low prices, falling an additional 8% to $ 26,570, while a week ago it was close to $ 40,000 and last November it was close to $ 70,000.
According to data announced yesterday, inflation in the US increased in April at an annual rate of 8.3% compared to 8.5% in March, but higher than the 8.1% forecast by economists.
US markets showed steady changes after the announcement of inflation data, closing with a big drop, while stock futures point to a new fall today by 0.2% – 0.7% of the S&P 500, Nasdaq and Dow Jones.
Its stock index MSCI for Asia-Pacific, excluding Japan, fell 2.3% to a 22-month low, while the Japanese Nikkei fell 1.8%.
The benchmark index of 10-year US government bonds fell yesterday and today fell an additional 7 basis points to 2.8569%.
In Germany, the yield on 10-year bonds decreased by 12 basis points. at 0.875%, the lowest level in almost two weeks.
The prospect of raising interest rates is pushing the dollar higher and has the biggest impact on the riskier assets, which had jumped in the previous two years of strong monetary support and low-interest lending.
The Nasdaq fell nearly 8% in May and more than 25% since the beginning of the year, while Hong Kong ‘s Hang Seng Index fell 1.5% today and is down more than 30% this year.
Cryptocurrency prices are also falling freely, with the collapse of stablecoin TerraUSD exacerbating the turmoil as well as the sales of bitcoin and ether which is the second largest cryptocurrency.