Daily Analysis

Global Markets Grapple with Inflation Data, Central Bank Decisions, and Economic Uncertainty   Overnight in the Asia-Pacific markets, investors were keeping an eye on upcoming inflation data from various countries. Singapore and Australia are set to release August inflation figures this week, while Japan will unveil inflation data for the Tokyo region, often viewed as a nationwide indicator. In European markets on Monday, there was a decline as investors reflected on several central bank decisions from the previous week and the possibility of prolonged higher interest rates. The Bank of England and the Swiss National Bank chose to pause their interest rate hikes, in contrast to the "dovish hike" by the European Central Bank on September 14. Furthermore, German business sentiment deteriorated in September, marking the fifth consecutive monthly decline, according to a survey by the Ifo Institute. The business climate index dropped to 85.7, slightly below the revised August figure of 85.8 but still above the 85.2 as forecasted by analysts in a Reuters poll. Germany's 10-year benchmark yield reached its highest level since 2011, while the US 10-year yield was heading toward a 16-year high. Meanwhile, there are growing concerns about China's property developers, with China Evergrande Group canceling a creditor meeting, raising worries about its substantial debt burden. The situation is compounded by a more hawkish stance from the Federal Reserve, rising Treasury yields, and the looming possibility of a government shutdown, all contributing to a mix of risks that have unsettled investors and cast uncertainty over the outlook for US equities. US stocks have slid over 6% from their late July highs, with the past week witnessing heightened volatility following the Fed's announcement of maintaining elevated interest rates for an extended period, leading to sell-offs in both US stocks and bonds.