Price lists in red throughout Europe.
At the start of the session, London lost 0.9%, Paris 1.6%, Frankfurt 1.43%, Milan 2%. Levels are low since early March with investors fearing rising inflation and consequently more aggressive monetary tightening, which increases the risks of a recession. The tension on the spread between BTP and Bund is growing, which widens beyond 230 points (231.5) with yields pushed higher and higher: the Italian one at 3.85% on the highest since 2014 and the German one rising above the ‘1% for the first time in more than a decade.
Asian stock exchanges also collapsed, frightened by higher-than-expected US inflation and with renewed Covid-19 restrictions in China weighing on investors’ risk appetite. The MSCI Asia Pacific Index dropped to -2.4%, Hong Kong (-3.6% ongoing), Japan (-3%) and South Korea (-3.4%) were among the major bears. Stocks in Southeast Asia were relatively resilient, with benchmarks in Singapore and the Philippines down less than 1%.
Shanghai (-1.2%) and Shenzhen (-0.8%) also contained losses.
All eyes are on the Fed’s next moves.
The price of Bitcoin also sinks. The most widespread of cryptocurrencies lost 8.9% in Asia, falling below the threshold of $ 25,000 (24,903), an 18-month low, or since December 2020.
Markets are feeling the effects of Friday’s long wave in an all-out week into Wednesday when the Fed announces its interest rate decision.