Global markets fall in anticipation of US Fed actions

Global stock markets have shown massive declines as investors brace for even stronger action from the US Federal Reserve as inflation picks up, Report informs.

The yen rose more than 1% from recent 24-year lows against the US dollar on reports that the Bank of Japan conducted a rate check, apparently preparing for foreign exchange intervention.

Data released on September 13 showing rising US core inflation resonated around the world.

The European stock market lost 0.3%, retreating even further from the almost three-week highs reached the day before. The London FTSE index fell 1%, despite the data on the unexpected decline in inflation in the UK in August.

In Asia, the Japanese Nikkei fell 2.6%, while the broadest MSCI index for Asia Pacific excluding Japan fell 2.2%. US stock futures showed mixed dynamics after the sharpest drop on Wall Street in two years.

According to CME FedWatch, money markets are fully quoting an interest rate hike of at least 75 basis points, with a 38% chance of a full percentage point increase in the federal funds rate. The Fed meeting will be held next week.