Benchmark stock indexes dropped more than 2% in Hong Kong, Japan and South Korea. European and US futures slid, extending a move that saw the S&P 500 cap its worst run since early 2020. Apple scrapped plans to increase iPhone production, further weighing on sentiment.

A gauge of the dollar set a fresh all-time high, the pound and the euro fell and the offshore yuan depreciated to the weakest on record versus the greenback as the Fed’s tightening stance damped sentiment. The yen remained near the key 145 mark versus the dollar and within sight of levels that have drawn intervention from Japan.

The yield on the US 10-year Treasury touched 4% for the first time since 2010. Rates on similar dated Australia bonds reached a three-month high while Japan’s benchmark yield closed at the upper limit of the central bank’s target band on Tuesday.

Federal Reserve officials reiterated their determination to tame inflation, with James Bullard underscoring the need for tighter monetary policy.

“The fact we have such a strong increase in US yields is attracting flows into the US dollar,” said Nanette Hechler-Fayd’herbe, chief investment officer of international wealth management for Credit Suisse Group AG. “As long as monetary and fiscal policy worldwide are really not coming to strengthen their own currencies, we should be anticipating a very strong dollar.”

Leaks to a gas pipeline between Russia and Western Europe were labelled as sabotage by US and German officials, ratcheting up friction with Vladimir Putin’s regime. Russia threatened to cut off gas to Ukraine’s allies in Europe and annexed a large chunk of Ukraine in the latest signs of escalating conflict.

European gas prices rose while worries about slowing global growth weighed on other raw materials, sending a Bloomberg index of commodity prices to the lowest level since February. West Texas Intermediate crude fell to around $77 per barrel.

UK markets were again in turmoil days after the new prime minister unveiled sweeping tax cuts that threaten to add to inflationary pressures. The 30-year UK government bond yield topped 5% for the first time in two decades. BM/DM