European stocks fell to a two-month low on Friday after slides on London-Asia and Wall Street, and euro zone inflation data is expected to reach a 13-year high as investors’ fears are compounded by rising prices.
On the first day of October, the month for the most infamous market routes in history, the STOXX index of 600 companies fell 0.9 percent, hitting its weakest level since mid-July.
MSCI’s global stock gauge fell 0.4 percent, indicating a further fall in U.S. stock futures.
Michael Hewson, chief market analyst at CMC Markets, said that as the Rear View Mirror now has great economic growth figures, the markets are looking ugly in October.
Overnight data showed that Asian manufacturing activity stagnated sharply in September as signs of a slowdown in China’s growth put pressure on the region’s economy.
“There’s a perception that October’s reputation, rising fuel prices, disruption of supply chains, inflation and concerns over power shortages could be a fairly windy October,” Hewson said.
The headline Eurozone inflation flash estimate could be at 0900 GMT, with UniCredit expecting a 3.3 percent year-over-year increase, the highest level since 2008.
“We expect headline inflation to reach close to a maximum percentage point in November,” Unicred analysts said in a note.
U.S. stock futures pointed to a 0.60 percent decline for the S&P 500, after the index fell 1.19 percent overnight, breaking its worst month since March last year.
The dollar, however, started near the highest level of the year in the last quarter of 2021 and was moving towards its best week since June as currency markets prepared for US interest rates to rise before their older peers.
The dollar index, which measures currencies against six major rivals, closed at a one-year high of 94.504 on Thursday, changing hands at the latest 94.287. Meanwhile, the 10-year U.S. Treasury benchmark was 1.5013 percent.
In Asia, Japan’s Nikkei fell 2.3 percent to its lowest level since Sep-September.
Chinese markets are closed for a week from Friday for the Golden Week holiday.
Debate continued over whether rising inflation matched Patchia’s growth.
Federal Reserve Chairman Jerome Powell said Wednesday that resolving the “tension” between high inflation and high unemployment is the Fed’s most urgent issue, acknowledging a potential conflict between the two goals of the US Federal Reserve’s stable price and full employment.
Recent signals on the way to the Fed’s policy normalization come day after day with data on U.S. personal spending and key spending cuts.
For the first time in three years, crude prices fell after Brent surpassed 80 800 a barrel at the start of the week.
Brent crude futures fell 0.5 percent to .9 77.92 on Thursday and U.S. crude futures fell 0.6 percent to .5 74.57.
Gold has been down 0.26 percent to 75 1,752 an ounce, the biggest since March, following a 1.77 percent downtrend on Thursday, despite being a hedge against inflation and a safe haven.
By Hu Jones
This News Originally From – The Epoch Times