Yahoo Finance

• Global shares slid for a third day on Monday, as investors grew increasingly twitchy about the outlook for the economy.

• Friday's US jobs data served to reinforce expectations for the Federal Reserve to rapidly raise rates.

• The dollar hit its highest since 2002, while crude oil eased in the face of a darker demand outlook in Asia.

Global shares slid for a third day on Monday, after strong US employment data on Friday suggested the Federal Reserve has even greater scope to raise interest rates aggressively to combat inflation.

Data on Friday showed the US economy added 428,000 jobs in April, in line with March's downwardly revised 428,000 gain and beating forecasts for a 391,000 increase. This was the 12th month in a row that nonfarm payrolls rose by over 400,000.

The futures market now indicates an almost-50% chance that US rates will reach 3.00% by the end of the year, from 1% right now. Just six weeks ago, the chances were closer to 14%. Since then, data releases have shown inflation has not abated, but economic growth has also been reasonably resilient, which could give the Fed room to raise rates faster without risking a slowdown.

"With inflation running hot, it's going to take a fairly sizable risk-off move to get the Fed to re-pivot dovish," Jefferies strategist David Zervos said.

"There is almost no downside for Fed in acting aggressively, and even if they expect inflation to head lower in coming quarters, why not go big on the accommodation-removal front and then take credit for the dis-inflationary successes?" he said.

US stock futures sagged, with those on the S&P 500, Dow Jones and Nasdaq 100 falling between 1.2% and 1.6%. The MSCI All-World index fell 0.6%, dropping for a third straight day.

With a set of rapid increases in US interest rates now on the cards, the dollar hit its highest level in almost 20 years against a basket of major currencies, luring in investors with the prospect of juicer returns on US assets than on those elsewhere.

The dollar index was up 0.4% at 104.35, its highest since late 2022, while the benchmark 10-year US Treasury yield rose 4 basis points on the day to 3.173%, its highest in well over three years.

Next up in key data is US consumer inflation on Wednesday. Economists expect to see the rate ease to 8.1% in April, from March's 8.5%.

"Lower gasoline and used car prices should knock headline and core CPI off its highs. Any larger-than-expected falls can perhaps suggest that the Fed need not be as aggressive in its hiking plans," ING strategists led by Chris Turner said in a note.