Asian Stocks Fall 1.8% as Oil Surge Stokes Inflation Fears — SkimNews
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- MSCI's Asia Pacific equities gauge fell 1.8% to a one-week low, with all 11 industry groups retreating as renewed Middle East fighting drove oil prices higher and fueled inflation fears.
- MSCI's All Country World Index — the broadest measure of global stocks — dropped to its lowest level in almost a month as the selloff spread beyond Asia.
- Stocks, bonds, and gold all declined simultaneously in a broad cross-asset retreat, with rising oil and inflation expectations driving expectations of tighter monetary policy.
- Krishna Guha, vice chair and head of central bank strategy at Evercore ISI, said inflation, oil prices, and bond yields now matter more to the Federal Reserve than US jobs data when deciding whether to raise interest rates at this month's meeting.
- European futures pointed to further weakness when markets open, extending the selloff beyond Asia.
Why it matters: Stocks, bonds, and gold fell together — a rare cross-asset drop driven by oil-spiked inflation fears. Evercore ISI's Krishna Guha warned the Fed will now weigh energy prices and yields over jobs data in deciding whether to raise rates this month, raising the stakes for the September meeting and forcing investors to reprice the path of monetary policy.
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