Possibility of stagflation brought to global agenda
Rising oil prices raise concerns over economic growth across world
The possibility of stagflation is brought to the agenda amid rising oil prices and macroeconomic data giving mixed signals which threaten economic growth across the world.
Global markets will monitor US Job Openings and Labor Turnover Survey (JOLTS) for August and the German ZEW Economic Sentiment Index for October.
Oil prices saw their peak on Monday over the double whammy of global supply worries from major producers and growing demand. The price of Brent oil reached its highest level since October 2018 at $84.2 per barrel, while the US benchmark West Texas Intermediate was traded at $82.3 per barrel, its peak since October 2014.
Risk appetite dampened in Asian stock markets as China started inspection of financial regulators, large state-owned banks, and insurance companies in a bid to wipe out corruption.
European stocks closed mixed on Monday amid high energy prices which also shake the confidence in the sustainability of the economic recovery.
US stock markets on Monday saw a sell-off as commodity prices continued to increase and backed concerns that inflation would remain on the agenda longer than expected.
Analysts said that the factors that reduce the risk appetite in global stock markets are still present and that investors may wait until the US inflation number and the US Federal Reserve's meeting minutes are released on Wednesday.