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European indices bordering on being down by 2%
The pressure on equities is not letting up so far in European morning trade as the DAX is now down by 2% on the day with other major indices in the region holding losses thereabouts on the session at the moment.
A look at US futures also isn’t painting a pretty picture:
Inflation fears are biting hard as the energy crisis is exacerbating the worries brought about from supply and capacity constraints. From earlier today:
It is shaping up to be one of those days where all of this is leading to higher bond yields and bolstering yen pairs as well as the dollar. But if things stretch too far, expect the drag on equities to turn into a broader flight to safety later in the day.
Commodity currencies are the worst-hit by all this and are put in a lose-lose situation no matter how things play out on the day.
We’re already starting to see that come into play with USD/JPY trimming gains from 111.75 to 111.55 over the past hour or so and the aussie and kiwi being dragged to fresh lows on the day, with the former down 0.9% and the latter down 1.2% against the dollar.
