Global markets slumped on Monday (May 17) and gold briefly reached a three-month high as surging COVID-19 cases in Asia and inflation pressures weakened demand for stocks.
Markets have been volatile in recent weeks as central bank stimulus and rising prices in the United States fuel concerns that some economies could overheat, requiring policymakers to raise interest rates.
The MSCI World Index, a broad gauge of equity markets globally, was flat in European trading Monday. That followed its best day since February last Friday (May 14) after an early week inflation-driven selloff.
In the U.S., S&P 500 futures and Nasdaq futures were both pointing to a lower open for Wall Street, down 0.4%.
The MSCI’s broadest index of Asia-Pacific shares outside Japan was also flat on Monday, while Japan’s Nikkei was down 0.9% and Chinese blue chips were up 1.5%.
April wholesale prices in Japan, the world’s third-largest economy, rose at their fastest pace in six and a half years, as rising energy and commodity costs ate into corporate margins, although consumer price inflation remains subdued.
In China, retail sales rose 17.7% in April from a year earlier, although they fell short of forecasts for a jump of 24.9%, while industrial output matched expectations with a rise of 9.8%.
The spread of COVID-19 was also a drag with Singapore reporting the highest number of local infections in months and Taiwan seeing a spike in cases.
This week, investors’ eyes will be on the minutes of the U.S. Federal Reserve’s latest policy meeting for clues about any tightening in monetary policy. To date, the Federal Reserve has argued that the inflation spike is transitory.
After reaching a six-week peak just above 1.70% last week, 10-year Treasury yields edged lower and were around 1.62% early on Monday, while the U.S. dollar was down 0.1% against a basket of currencies at 90.20.
The Euro currency was last up 0.2% at $1.2162, having climbed 0.5% as yields eased.
The dip in U.S. yields combined with inflation concerns helped gold to a three-month peak of $1,855 an ounce before pulling back to trade up 0.4% at $1,849 an ounce.
Oil was also flat on Monday, with Brent and U.S. crude last down 0.1% at $68.62 and $65.29 a barrel, respectively.
