Global stock markets slipped for the second straight day on Wednesday, 29th of June. Bond yields inched lower on growing fears that policymakers bent on dampening inflation will tip their economies into recession.
There was a succession of weak data releases in Europe and the United States. This has led central banks to double down on hawkish rhetoric.
More is likely later on Wednesday when the heads of the European Central Bank, U.S. Federal Reserve and Bank of England speak at a central banking forum.
Consumers signal recession ahead as confidence dropped to a 16-month low in June according to available data on Tuesday. Despite this, several Fed policymakers pledged further rapid interest-rate hikes, citing the need to tame “unbridled” inflation.
Those U.S. figures, following a raft of dismal consumer confidence data across Europe, triggered steep Wall Street falls, sending the S&P 500 and the Nasdaq indexes down 2% and 3% respectively (.SPX), (.NCQ1).
That weaker momentum carried into Wednesday, sending an Asian ex-Japan index 1.4% lower (MIAPJ0000PUS), while a pan- European equity index (.STOXX) eased 0.3%, snapping a three-day rally.
U.S. and German 10-year bond yields slipped 5-6 basis points, the former down more than 30 bps from mid-June highs , .
The consumer sentiment deterioration clearly points to recession, Citi told clients.
After 7.5%-7.9% annual inflation prints across German provinces, an 8% June reading is expected for the country later in the day, versus 7.9% in May.
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