European stocks lost more than 1%: inflation fears return

European stock markets collapsed at the trading on Ma 15. After the summit of the USA and China ended without significant breakthroughs, investors again turned their attention to the problem of inflation, writes CNBC. Also European stocks are reacting to the looming political crisis in British Prime Minister Keir Starmer's party.

Against this background, the pan-European index Stoxx 600 collapsed by more than 1%, the British FTSE 100 lost 1.17%, the German DAX - in the minus by 1.6%, the French CAC 40 is also falling by more than 1%.

Brent crude oil with delivery in July, amid US President Donald Trump's statements that China has agreed to buy oil from the United States, jumped more than 3% to $109 per barrel on May 15. U.S. WTI is also up 3.78% to nearly $105. Following the meeting in China, Trump told reporters that both he and Chinese leader Xi Jinping want an end to the war in the Middle East, and the two sides agreed that Iran should not have nuclear weapons. However, tensions between Washington and Tehran remain, with little progress toward a lasting peace agreement, Barron's states. The Strait of Hormuz, which effectively halted shipping in late February, remains closed.

Concerns about oil supply, as well as related inflation risks , pushed government bond yields around the world up on May 15. Growing evidence of economic damage from the war with Iran has led investors to assume that interest rates will rise faster than expected and the growth rate of economies will slow, writes Reuters. All this led to the fact that the yield on U.S. Treasury bonds reached on Friday the maximum for about a year. British gilts and eurozone bonds - including German, Italian and French debt securities - also came under pressure. Japanese government bond yields, meanwhile, hit record highs.

Inflation data this week showed that consumers and businesses are starting to feel a significant increase in price pressures as a result of the Middle East crisis, which has already driven oil prices up more than 50% since late February.

"Treasury yields around the world have probably reached a level where they are already high enough to negatively impact investor sentiment," noted DBS senior interest rate strategist Eugene Leo (quoted by Reuters). - With a robust global economy driven by artificial intelligence and higher energy prices, central banks appear to be more concerned about inflation," he added.

"The focus should not only be on inflation but also on the widening fiscal deficit," Jefferies strategist Mohit Kumar remarked in turn. - A number of support measures for fuel subsidies are likely to be announced in the coming months," he suggested.

In addition, in the UK, government bond yields this week showed sharp fluctuations, reaching the highest level in decades, notes Reuters. Such dynamics the British debt market demonstrates against the background of increasing pressure on Prime Minister Keir Starmer due to the defeat of his Labor Party in local elections in early Ma, as well as the emergence of new challengers to his post in the party and Parliament, the agency points out.

This article was AI-translated and verified by a human editor