• In US economic data, consumer inflation expectations rose from 6.3% to 6.6% in May (survey: 6.2%).
• European sharemarkets fell on Monday. Investors fear that aggressive rate hikes by the US Federal Reserve to control inflation could sharply slow global economic growth. Travel & leisure fell 5.3%, automakers fell by 4.5% and technology fell 4.2%. French banks fell 4.0-4.7% on uncertainty over lower house election results. The pan-European STOXX 600 index fell by 2.4% to 3-month lows. The German Dax index fell by 2.4% and the UK FTSE index lost 1.5%. In London trade, shares of Rio Tinto fell by 1.9% and shares in BHP fell by 2.2%.
• US sharemarkets slumped again on Monday. Investors fear that aggressive inflation-fighting rate hikes could tip the economy into recession. Reuters reported “Cryptocurrency- and blockchain-related stocks, including Riot Blockchain, Marathon Digital Holdings and Coinbase Global, all plunged as bitcoin slumped more than 10% after major US cryptocurrency lending company Celsius Network froze withdrawals and transfers citing “extreme” conditions.” The Dow Jones index fell by 876 points or 2.8%. The S&P 500 index lost 3.9% with the Nasdaq index down by 532 points or 4.7%.
• US treasuries fell on Monday (yields higher) on expectations that the Federal Reserve could lift rates by 75 basis points on Wednesday. US 10-year yields rose by 22 points to near 3.37% – near an 11-year high. And US 2-year yields rose by 32 points to near 3.37% – a 14-year high.
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• Major currencies were generally weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0490 to lows near US$1.0400 and was near US$1.0410 at the US close. The Aussie dollar fell from highs near US70.30 cents to lows near US69.10 cents and was near US69.25 cents at the US close. The Japanese yen rose from near 134.90 yen per US dollar to JPY133.60 but then weakened to near JPY134.45 at the US close.
• Global oil prices rose by 0.2% on Monday. Tight global supplies outweighed fears over global growth and fresh Covid outbreaks in China. Reuters reported: “Beijing’s most populous district Chaoyang announced three rounds of mass testing to quell a “ferocious” COVID-19 outbreak.” The Brent crude price rose by US26 cents or 0.2% to US$122.27 a barrel. And the US Nymex crude price rose by US26 cents or 0.2% to US$120.93 a barrel.
• Base metal prices fell by between 1.7-6.7% on Monday with copper down the least and tin down the most.
• The gold futures price fell by US$43.70 or 2.3% to US$1,831.80 an ounce. Spot gold was trading near US$1,824 an ounce at the US close. The iron ore futures price fell by US$2.84 or 2.0% to US$139.53 a tonne.
Ahead: The CBA household spending intentions report is due. The Bureau of Statistics releases the household spending indicator and value of dwellings report. The NAB business survey is released. In the US, the Federal Reserve begins a 2-day meeting. Data on producer prices is released with the NFIB business optimism index, weekly chain store sales and the IBD/TIPP economic optimism index.
Published by CommSec