Key facts
- Global bond yields and oil prices surged on Thursday, while stocks slumped.
- The European Central Bank raised interest rates to quell energy-driven inflation.
- U.S. crude futures and Brent crude surpassed $100 a barrel.
- President Trump promised a $5,000 "Trump dividend" to U.S. adults if his party wins the midterm elections.
- U.S. producer price inflation data for August is due Thursday.
- One-year U.S. inflation swaps nudged higher to 2.70%.
Global bond yields and stocks experienced significant volatility on Thursday, with yields reaching multi-year highs and equities declining, driven by a confluence of factors including rising oil prices, anticipated central bank actions, and political developments. Oil prices surged above $100 a barrel, with U.S. crude futures and Brent crude surpassing this mark due to concerns over prolonged conflict in the Middle East and potential supply disruptions.
The European Central Bank (ECB) raised its key interest rate for the second time this year, aiming to curb energy-driven inflation. President Christine Lagarde described the move as a "no-brainer" and warned that price pressures could be more persistent than previously expected, fueling market bets on further policy tightening.
In the U.S., markets are closely watching upcoming inflation data, with producer price inflation figures for August described as "warm enough" to increase the likelihood of a Federal Reserve rate hike next week. One-year U.S. inflation swaps have risen to 2.70%.
Adding to market uncertainty, U.S. President Donald Trump proposed a "Trump dividend" of $5,000 for every U.S. adult if his party secures victory in the November midterm elections, a move that has raised concerns about potential inflationary impacts. The dollar edged higher against major currencies as investors awaited these key economic indicators and central bank decisions.