By Wayne Cole SYDNEY (Reuters) – Asian stocks fell on Monday as Wall Street futures fell slightly amid worries that the US Federal Reserve would reiterate its commitment this week to tackling inflation with any difficulty required. The euro showed little reaction when French President Emmanuel Macron lost control of the National Assembly in Sunday’s parliamentary elections, a major setback that could have plunged the country into a political stalemate. Trading was volatile with the US on breaks and Nasdaq futures rose 0.3% during the last session, while they stabilized 0.2%. EUROSTOXX 50 futures fell 0.3% and futures 0.2%. The index fell almost 6% last week to trade 24% below the January high. BofA analysts note that this was the 20th bear market in the last 140 years and the average decline from the top to the bottom was 37.3%. Investors will hope it does not correspond to the average duration of 289 days, as it will not expire until October 2022. MSCI’s broader Asia-Pacific equities index outside Japan lost 0.4% and Tokyo 1.2%. Chinese blue chips gained 0.5%, perhaps with the help of the news that President Joe Biden was considering the removal of certain tariffs in China. Concerns looming over the markets are the big central banks that will have to tighten so aggressively to curb the invisible inflation that will lead the world into recession. “Market volatility remained high with the highest weekly closing since the end of April, an issue that outperformed stocks by raising foreign exchange and underscoring volatility alongside wider credit margins,” said Rodrigo Catril, a strategic analyst at NAB. “At this stage it is difficult to see a turnaround until we see evidence of a substantial easing of inflationary pressures.” The relief looks unlikely this week, as data on inflation in the UK is expected to show another alarmingly high price that could push the Bank of England on a faster pace. THE FED GOES UP A whole host of choir central bankers are also on the speech calendar this week, led by a possible aggressive testimony from Federal Reserve Chairman Jerome Powell’s in Parliament on Wednesday and Thursday. The Fed last week promised its commitment to curbing inflation was “unconditional”, while Fed Governor Christopher Waller said on Saturday he would support a new 75 basis point increase in July. “Given the rapid slowdown in growth and the Fed’s commitment to restoring price stability, we believe a mild downturn starting in the fourth quarter is now more likely than not,” Nomura analysts warned. “Economic conditions are likely to tighten further, consumers are experiencing a significant negative shock, energy and food supply disruptions have worsened and growth prospects abroad have deteriorated.” The hawk perspective keeps the dollar at 104,420 and close to last week’s two-decade high of 105,790. The euro was slightly more stable after the French election at $ 1.0524, but is still uncomfortably close to last week’s threshold at $ 1.0357. The yen remained under widespread pressure as the Bank of Japan remained steadfast in its ultra-easy policies, even as all similar companies in the developed world tightened their grip. The dollar remained stable at 134.98 yen, reaching its highest level since 1998 last week. fell 3% to $ 19,897, having recovered sharply over the weekend amid discussions about a single major buyer. The strength of the dollar kept gold in a tight sideways pattern last month or so, and last traded at $ 1,841 an ounce. [GOL/] Oil prices fell again after falling sharply late last week amid concerns that high energy prices were raising the risk of a global recession that would eventually limit demand. [O/R] fell 10 cents to $ 113.02, while losing 27 cents to $ 109.29 a barrel.
