GLOBAL MARKETS-Inflation fears spook US stocks, Treasury yields jump

* US CPI rose 0.8% in April vs 0.2% forecast
* MSCI's global stock gauge down for third straight day
* U.S. Treasury jump on inflation data
* World FX rates https://tmsnrt.rs/2RBWI5E

By Koh Gui Qing
NEW YORK, May 12 (Reuters) - U.S. stocks fell again on
Wednesday as benchmark Treasury yields jumped after data showed
consumer prices unexpectedly rose by the most in nearly 12 years
in April, prompting bets on earlier interest rate hikes.
Moments after data showed the U.S. consumer price index
jumped 0.8% last month, outpacing a 0.2% forecast, the dollar
spiked, only to tumble minutes later to stand little changed.
The gyrations in financial markets underscored concerns
among some investors that the Federal Reserve could be wrong in
its prediction that inflation pressures in the United States are
"transitory", and that the central bank may have to raise rates
sooner than it currently expects to.
"We've been warning about the prospect of higher for longer
inflation in the United States for many months, but even we
hadn't predicted this," said James Knightley, chief
international economist at ING Group, adding that there is
evidence of "broadening price pressures".
"We increasingly doubt the Fed's position that this is
transitory and think they will end up hiking rates far sooner
than 2024."
The prospect of tighter monetary policy knocked shares
lower. The Dow Jones Industrial Average .DJI shed 0.65%, the
S&P 500 .SPX dropped 0.81% and the Nasdaq Composite .IXIC
slipped 1.4%. .N
Weakness on Wall Street mirrored stock market losses
elsewhere, as surging commodity prices stoked inflation
concerns. MSCI's broadest index of Asia-Pacific shares outside
Japan .MIAPJ0000PUS had slumped 0.95% overnight, after hitting
its lowest level since March 26.
The unexpectedly strong inflation data lifted U.S. Treasury
yields. The benchmark 10-year Treasury yield US10YT=RR climbed
to 1.6737%, and the two-year Treasury yield US2YT=RR also rose
to stand at 0.1708%. US/
The dollar, which could benefit from rate hikes, struggled
however to hang onto gains made moments after the release of the
inflation data.
The dollar index =USD , which measures the greenback
against six major currencies, was steady at 90.595. USD/
Higher Treasury yields weighed on gold prices. Spot gold
XAU= fell 0.3% to $1,831.36 an ounce. XAU= GOL/
Oil prices were firm, helped by signs of a speedy economic
recovery and upbeat forecasts for energy demand, although waves
of COVID-19 infections in India and Brazil curbed gains.
U.S. crude CLc1 jumped 1.73% to $66.4 a barrel. Brent
crude LCOc1 leapt 1.6% to $69.71 per barrel. O/R
In cryptocurrencies, ether ETH=BTSP was off a new record
high struck overnight but was still firm at $4,357.07. The value
of the second-biggest digital token has surged over 5.5 times so
far this year.

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Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
US inflation https://tmsnrt.rs/3tF1WzY
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