And with that the probability of 3% US interest rates by the end of the year shot up to 75%.
The CSI 300 index tumbled by 4.9% on Monday after speculation mounted that the capital, Beijing, was about to follow China’s commercial and financial hub, Shanghai, into a damaging and possibly extended lockdown.
So, the market set up could hardly have been worse for a Europe waking up to a predictably close-run French election result in which incumbent President Emmanuel Macron just managed to fend off his far-right rival, Marine Le Pen.
With investor sentiment, and so stock market valuations, in retreat, the pressure is on corporate earnings to keep the market’s head above water.
The flight to safety is clearly evident in currencies, with the dollar boosted by risk aversion and rising US interest rates.
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