New York stock indices closed Thursday (29) in a strong fall, with international sovereign bonds returning to pressure the stock market.
At the close of trading, the Dow Jones lost 1.54%, the S&P 500 fell 2.11% and the Nasdaq dropped 2.84%. That was the worst result for the S&P 500 in two weeks, with the index still rocking dangerously close to a 2-year low.
Trouble on all sides: 10% inflation in Germany is the highest since post-war
With no relevant domestic indicators, it was the turn of US investors to feel the impact of the consumer inflation index (CPI) of the largest European economy.
According to Germany’s statistical agency, there was a drastic 2.1% increase in inflation between August and September, up from 10% in 2022. The last time this happened was in 1952.
The inflationary advance generated a new rally in sales of sovereign bonds in Europe and the US, practically nullifying the effects of the action of the British Central Bank, which yesterday announced the purchase of long-term bonds in order to restore market balances.
The liquidation of bonds brought a new increase in the rate of yield on bonds, resuming the growing attractiveness of fixed income in relation to the variable income market.
At the end of trading, 2-year T-bills yielded 4.201%, up from 4.139% the day before. The 10-year T-notes yielded 3.776%, up from 3.736% on Wednesday afternoon.
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