Hong Kong, July 4 (AFP/APP): Asian markets were mixed and oil fell as traders fret over a possible recession caused by central bank interest rate hikes aimed at fighting soaring inflation.
After the S&P 500’s worst January-June since 1970, Wall Street got the second half off to a healthy start Friday as a below-forecast reading on US manufacturing provided hope banks will not go on an extended period of monetary tightening.
That followed a drop in confidence among consumers — a key driver of the world’s top economy.
However, National Australia Bank’s Rodrigo Catril said the Federal Reserve and other global financial chiefs might not ease back on their rate hikes too soon as inflation remains elevated.
“While the data is suggesting a US economic slowdown is coming, we are not yet seeing signs of an ease in inflationary pressures, an important distinction given the Fed will continue with its aggressive tightening approach until it sees evidence of the latter,” he said in a commentary.
In a sign of the struggle officials will have in controlling rising prices, figures showed eurozone inflation hit a record 8.6 percent in June. The European Central Bank is due to lift rates this month for the first time in more than a decade.
Still, while surging prices remain a huge problem, Chris Weston, at Pepperstone Group, said the psychology is “shifting radically from inflation concerns to one now where we’re firmly focused on growth”.
While New York provided a strong lead, Asia struggled.
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