Investors on Monday bought dollars, sold stocks and worried about inflation. A scramble ensued to assess the risk of a trade war after Donald Trump put tariffs on top U.S. trading partners. Trump's ordered additional levies of 25% on imports from Mexico and most goods from Canada, as well as 10% on goods from China. They're set to take effect on Tuesday, and will affect $1.3 trillion of goods, or more than 40% of all U.S. imports. The pan-European STOXX 600 index was down over 1% in early trade, set for its biggest one-day slide this year. And the euro currency also dropped more than 1%
Wall Street opened lower to extend losses. London was flat
While the Fed reassured markets that it won’t raise the federal funds rate, the biggest issue is the markets still have doubts about inflation given strong growth and the big stimulus package
The bond market is likely to remain bearish with yields inching up in near future on the back of oversupply of government securities (Gilt or G-Sec) along with inflation concerns, treasury officials said.
Vindi Banga, Senior Partner of Clayton Dubilier and Rice (CD&R) and former CEO of HUL spoke to CNBC-TV18's Sonia Shenoy and Mitali Mukherjee, where he said that inflation will eat into the disposable income of ordinary consumers in the end.
Spot gold prices breached USD 1,500 for the first time and silver hit a 31-year high on Wednesday, supported by a weak dollar and concerns over a sovereign debt crisis in the euro zone.
Demand in China for physical gold and gold-related investments is growing at an "explosive" pace and its appetite for the yellow metal is poised to remain robust amid inflation concerns, said an Industrial and Commercial Bank of China (ICBC) executive.