Higher than expected inflation number triggers selloff

Hotter than expected March inflation data triggered a wave of selling in US markets with the 10 year Treasury yield soaring back above 4.5 per cent.

The Dow Jones fell 1.09 per cent, the S&P 500 slid 0.95 per cent and Nasdaq Composite closed 0.84 per cent lower.

The March CPI came in a bit hotter than consensus expectations rising 0.4 per cent for the month and 3.5 per cent year on year, versus expectations of a 0.3 per cent monthly increase and 3.4 per cent year on year. Core CPI, which excludes volatile food and energy prices, accelerated 0.4 per cent from the previous month while rising 3.8 per cent from a year ago, compared to estimates for 0.3 per cent and 3.7 per cent, respectively. Investors are now questioning the timing of rate cuts this year and the likelihood any cuts would be pushed out to later in the year.

Minutes from the Fed’s March policy meeting raised concerns that inflation’s progress toward its 2 per cent target might have stalled, and restrictive monetary policy may need to be maintained for longer than anticipated.

Oil staged a rally on news that the US and its partners are expecting major missile or drone strikes by Iran against military and government targets in Israel.

Turning to US sectors, every sector with the exception of energy finished in the red. The worst performing sector was Real Estate which fell 4.1 per cent, followed by Utilities and Materials which fell 1.73 per cent & 1.55 per cent respectively. Energy was the only sector to finish in the green closing up 0.38 per cent.

In local news today, investors will be looking at Chinese inflation data expected to be released later in the day.

Futures

The SPI futures are pointing to a 0.8 per cent fall.

Currency

One Australian dollar at 7.25am was buying 65.15 US cents.

Commodities

Gold lost 0.59 per cent. Silver gained 0.24 per cent. Copper fell 0.08 per cent. Oil gained 1.15 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE added 0.33 per cent, Frankfurt rose 0.11 per cent, and Paris closed 0.05 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei fell 0.48 per cent, Hong Kong’s Hang Seng gained 1.85 per cent and China’s Shanghai Composite closed 0.70 per cent lower.

Yesterday, the Australian share market closed 0.31 per cent higher at 7,848.45.

Ex-dividends
Cosol Limited (ASX:COS) is paying 1 cent fully franked
Duxton Water Ltd (ASX:D2O) is paying 3.6 cents fully franked

Dividends payable
Brambles Ltd BXB)
Downer EDI Ltd DOW)
Fonterra Shareholders Fund FSF)
Macmahon Holdings Ltd MAH)
NRW Holdings Ltd NWH)
Orora Ltd ORA)
Pacific Current Group Ltd PAC)
Qube Holdings Ltd QUB)
Regis Healthcare Ltd REG)
Suncorp Group Ltd SUN)
Woolworths Group Ltd WOW)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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