Stock markets mostly rise as US inflation data looms
US consumer price inflation is in focus as the Federal Reserve prepares for its latest monetary policy decision next week
London – Equity markets mostly advanced Monday as investors turned attention to a key US inflation report due this week, hoping for a reading that would ease concerns about a further interest-rate hike from the Federal Reserve.
After a slow start, Asian traders turned more positive through the day and tracked last week’s gains on Wall Street, with data showing a pick-up in Chinese inflation lifting sentiment.
Eurozone stock indices made solid gains as investors waited to see if the Euroopean Central Bank would raise its interest rates again at a meeting Thursday.
Gas prices rallied as strikes continued at Chevron plants in Australia.
“This week sees a raft of market-moving data releases, with US inflation and the ECB meeting expected to provide plenty of volatility given the shifting interest-rate expectations in recent weeks,” noted Joshua Mahony, chief market analyst at Scope Markets.
While oil prices dropped Monday, recent strong gains have fuelled concerns that inflation could stay elevated for longer than expected, putting pressure on central banks to keep interest rates high.
Traders took heart from news that China’s consumer price index rebounded in August, having contracted the month before.
While the 0.1 percent rise was less than expected, it gave traders some hope that the economy is slowly on the mend after a painful 2023 so far.
US Treasury Secretary Janet Yellen looked to calm worries that the long-running rate hikes would cause a recession in the world’s top economy, saying she was optimistic it was on course for a soft landing.
“I am feeling very good about that prediction,” she said Sunday. “I think you’d have to say we’re on a path that looks exactly like that.”
She added: “Every measure of inflation is on the road down.”
On currency markets, the yen picked up after sinking last week to a 10-month low against the dollar, with support coming from comments seen as hawkish by Bank of Japan boss Kazuo Ueda.
He told the Yomiuri newspaper that policymakers would have a better idea later in the year about wage rises, a key data point for rate decisions.
The yen has tumbled around 10 percent owing to the BoJ’s refusal to move away from its ultra-loose monetary policy, even as the Fed pushed borrowing costs to a two-decade high.
The yuan also bounced from a 16-year low against the dollar after the People’s Bank of China said it would crack down on speculation that distorts the value of the currency after months of volatility.
– Key figures around 1100 GMT –
London – FTSE 100: UP 0.2 percent at 7,495.97 points
Frankfurt – DAX: UP 0.6 percent at 15,832.16
Paris – CAC 40: UP 0.6 percent at 7,286.26
EURO STOXX 50: UP 0.5 percent at 4,260.20
Tokyo – Nikkei 225: DOWN 0.4 percent at 32,467.76 (close)
Hong Kong – Hang Seng Index: DOWN 0.6 percent at 18,096.45 (close)
Shanghai – Composite: UP 0.8 percent at 3,142.78 (close)
New York – Dow: UP 0.2 percent at 34,576.59 (close)
Dollar/yen: DOWN at 146.87 yen from 147.81 yen on Friday
Euro/dollar: UP at $1.0736 from $1.0702
Pound/dollar: UP at $1.2517 from $1.2469
Euro/pound: DOWN at 85.76 from 85.83 pence
West Texas Intermediate: DOWN 0.5 percent at $87.08 per barrel
Brent North Sea crude: DOWN 0.3 percent at $90.42 per barrel