U.S. stagflation fears seeped into global markets on Thursday after surprisingly hot inflation data applied heavy pressure to U.S. Treasuries and sparked selling of government bonds everywhere from Germany to Japan.
Wall Street stocks took a hit too, with futures contracts tracking the domestically-focused Russell 2000 share index, which dropped 1.2% in the minutes after official data revealed an unexpectedly large jump in U.S. producer prices.
The producer prices index, which investors have been watching for signs of pipeline inflation pressures from U.S. President Donald Trump’s trade tariffs, rose 0.9% in July from the month before, trouncing consensus forecasts for a 0.2% gain.
European stocks held on to gains from earlier in the day and were last 0.2% higher, while Wall Street’s S&P 500 index was set to fall about 0.4%.
Two-year Treasury yields, which track monetary policy expectations, leaped by 4.3 basis…
