US inflation data

Impact of US Inflation Data on Global Markets

The recent surge in US inflation data has sent shockwaves through global markets, affecting stocks, currencies, and investor sentiments.

The latest US inflation data has caused ripples in the financial world, with Nifty IT index plummeting by over 2% in response to the hot consumer inflation figures released. The US recorded a consumer price rise of 3.1% in January, surpassing market expectations and leading to a downturn in Indian IT stocks. Volatility and repricing in trade are expected as this data signals potential economic shifts. Global stock market indexes saw a decline, with the 10-year US Treasury yield hitting a 2-1/2-month high and the dollar strengthening against the yen, following the inflation data unveiling.

Market analysts anticipate negative sentiments persisting in the Indian market for a couple of sessions as it awaits more micro data from the US for a comprehensive outlook. The Sensex fell by 700 points due to the unexpected acceleration in US inflation, which outpaced economists' predictions. Although inflation has decreased since its peak in June 2022, the current 3.1% surge in consumer prices has left many grappling with high costs. The impact of the US inflation data has also been felt on the dollar, which saw a decline in anticipation of the crucial inflation data for January.

The US inflation figures have triggered a global market response, with Asian shares dipping after Wall Street's downturn following the disappointing inflation report. The 10-year US Treasury yield surged after the CPI rose by 0.3% in January, emphasizing the persistent price pressures in the economy. While the data signals a slowdown in inflation compared to the previous month, it remains elevated, hinting at continued challenges in managing price levels amidst economic uncertainties.