US and European equity futures slipped on Wednesday, while bonds rose as concerns over slowing economic growth resurfaced ahead of a key US inflation report. The yen strengthened after a Bank of Japan official signaled potential interest rate hikes, adding further pressure to global markets.
Asian equities also struggled, marking their third consecutive decline, with Japan and Hong Kong experiencing the sharpest falls. Futures for US stocks dropped by 0.6%, signaling a cautious outlook among investors as they await the US consumer price index (CPI) report due later in the day and the Federal Reserve’s policy meeting scheduled for next week.
Worries about decelerating growth in major economies intensified as oil prices steadied below $70 per barrel, and global bond yields fell to a two-year low. Investor sentiment remains fragile, driven by concerns over the struggling Chinese economy and fears that the Federal Reserve may have delayed easing its monetary policy for too long.
Traders are increasingly speculating on at least one “super-sized” interest rate cut by the Federal Reserve this year. Many are hoping the CPI report will reveal another month of muted inflation increases, further reinforcing the case for monetary easing.
With growth concerns looming and central bank policies in focus, global markets are bracing for a potentially volatile period as investors navigate economic uncertainty and inflationary pressures.
