Commodity and bond markets point to a hard landing

In the Asia session, the yield on two-year Treasury notes jumped 14 basis points to 2.9691%, exceeding the 10-year yield of 2.9206%, which is suggestive of a slowdown in economic growth due to rate increases hitting.

US employment data showed higher openings than expected, and the services sector continued to do well. Detailed information about the labour market will be released on Friday, providing a clearer picture of the world's largest economy.

It is expected that Bullard and Waller will provide more insight into the thinking of the hawkish camp within the Federal Reserve in their upcoming speeches. They will speak today at 1700 GMT.

Euro sank to a 20-year low

Over the past few months, the Fed's tightening of global rates has stoked recession fears and adversely affected growth-sensitive commodities such as copper, oil and iron ore. In addition, the euro has been hammered by investors who see Europe as the centre of a global slowdown. Meanwhile, the euro is fast approaching parity with the dollar. This week, it dropped more than 2%, touching its lowest level since 2002 at $1.0162 before steadying at $1.0202 on Thursday.

Commodities reflect weakening demand

After touching a record high in June, the Bloomberg Commodity Spot Index has declined by more than 20%. As a result of concerns that a stagnating economy will hurt demand, prices for everything from gasoline to wheat are falling. Despite the tight supply of commodities, the retreat may relieve consumers experiencing high inflation.

It also shows that fears have grown that the Federal Reserve will not be able to contain the highest inflation in four decades without causing the economy to fall into recession. As a result of the strong US dollar, raw materials priced in the greenback have become more expensive. The stronger dollar and weakening demand caused hedge-fund managers to cut their bets on commodity prices to the lowest level in almost two years.