Stocks up, dollar squeezed as inflation pulls forward rate hike bets

stocks up dollar squeezed as inflation pulls forward rate hike bets

Sumary of Stocks up, dollar squeezed as inflation pulls forward rate hike bets:

  • Breadcrumb Trail Links PMN Business Author of the article: Reuters Tom Westbrook Article content SINGAPORE — Asian stock markets rose, the dollar eased and longer-dated bonds rallied on Thursday as investors reckoned on inflation bringing forward rate hikes around the world.
  • The Shanghai Composite was marginally softer while Hong Kong markets were closed for a holiday.
  • Overnight figures showed another solid increase in U.S. consumer prices, while minutes from last month’s Federal Reserve meeting showed policymakers’ growing concern about inflation and a general agreement to start tapering asset purchases soon.
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  • Article content Traders responded by bringing forward rate-hike expectations but lowering the projected peak.
  • In the bond market short-term Treasury yields rose while long-term yields fell, flattening the curve.
  • Longer-term yields also fell in Asia on Thursday and the dollar, which rallied through September, pulled back sharply with the decline in longer Treasury yields and took a breather on Thursday.
  • “The market continued to pull forward the pricing of the first rate hike while also decreasing terminal rate pricing, which we believe is a reflection of the market pricing in a policy mistake,” said analysts at TD Securities.

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