ASX 200 to fall; Wall Street slips after 40-year high inflation data

2 min read | July 14, 2022 08:06 AM AEST | By Ashish

ASX 200 to fall; Wall Street slips after 40-year high inflation data — Image source: © Joingate | Megapixl.com

Highlights

The Australian shares are likely to open lower on Thursday.

The latest ASX Futures indicate that the ASX 200 would open 2 points lower.

the Dow Jones fell 0.7%, the S&P 500 declined 0.45%, and the NASDAQ ended 0.15% lower.

The Australian shares are likely to open lower on Thursday after Wall Street slumped in the overnight trade on interest rate hike threat. Investors now anticipate a full percentage point rate hike following red-hot US inflation reading for June. Market is also awaiting US labour force data for June.

However, the domestic market may witness a rebound in gold and iron ore prices, while tech shares are likely to track a weak session.

The latest ASX Futures indicate that the ASX 200 would open 2 points lower. On Wednesday, the benchmark ASX 200 index ended 0.2% higher at 6,621.6 points.

Global equities

On Wall Street, the Dow Jones fell 0.7%, the S&P 500 declined 0.45%, and the NASDAQ ended 0.15% lower.

Wall Street saw a sell-off after June’s inflation number came in higher-than-expected. The June CPI index rose 9.1% from a year ago, hitting a 40-year high. It was the largest rise in consumer prices in over 40 years.

In Europe, the Stoxx 50 fell 1%, the FTSE declined 0.7%, the CAC slipped 0.7%, and the DAX ended 1.2% lower.

MSCI's broadest index of Asia-Pacific shares outside Japan ended 0.43% higher, while Japan's Nikkei rose 0.54%.

Bond yields

The US Treasury yield curve recorded its largest inversion since November 2020 on the US rate hike threat post release of inflation numbers and the International Monetary Fund’s (IMF) latest US growth forecast cut.

The yield on 10-year Treasury notes was down 5 basis points to 2.908%.

The US dollar index fell 0.148%, while the euro rose 0.17% to US$1.0053.

Oil prices rise

Oil prices inched higher on Wednesday despite a rise in US oil inventories.

Brent crude ended up 8 cents at US$99.57 a barrel.

WTI crude rose 46 cents to US$96.30 a barrel.

Gold prices inch higher

Gold prices surged on softer US dollar.

Spot gold rose 0.8% to US$1,739.49 per ounce by 1:59 PM ET (1759 GMT).

Meanwhile, bitcoin last rose 1.74% to US$19,656.85.

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