Your current location is:{Current column} >>Text
Peak inflation bet lifts stocks, dollar in doldrums By Reuters
{Current column}439People have watched
Introduction2/2© Reuters. FILE PHOTO: An investor monitors share prices during morning trading inside a brokerag ...

By Huw Jones
LONDON (Reuters) - Global shares edged higher on Thursday as investors bet on the pace of interest rate hikes slowing after data pointed to inflation peaking, leaving the dollar struggling after its biggest fall in five months.
Oil prices languished below $100 a barrel in search of direction, while better-than-expected earnings from Zurich lifted the insurer's shares.
Figures on Wednesday showed that U.S. consumer prices were unchanged in July compared with June, a two-year rise in inflation stopped in its tracks by a drop in gasoline prices.
Investors now turn to U.S. producer prices data, along with the latest jobless claims numbers, ahead of Wall Street's open.
Michael Hewson, chief markets analyst at CMC Markets, said peaking inflation could mean less aggressive interest rate hikes from the U.S. Federal Reserve when it meets in September. The Bank of England and European Central Bank also meet next month.
"Markets are getting ahead of themselves, and really it's not just about the fact that inflation has peaked but how far can it fall given the current environment," Hewson said.
"If you look at the problems that are still playing out across Europe with supply chains and gas prices, all it means is that prices will settle at a much higher mean rather than going back to 2%," Hewson said.
The weaker-than-expected U.S. consumer prices lifted Wall Street, with the momentum rippling through Asian exchanges and into Europe in early trading.
The STOXX index of 600 leading European companies was up 0.3%. The MSCI all country index was up 0.11%, but remains down about 14% for the year, wiping out most of 2021's 17% advance.
The World Federation of Exchanges said $18 trillion has been wiped off global markets in the first half of 2022, a 15% drop in stock market capitalisation, as the global economy tries to recover from COVID-19 and deal with fallout from war in Ukraine.
The euro and Japanese yen gained after the U.S. inflation data sent the dollar tumbling.
"We think a Fed doing battle with higher core inflation will keep the dollar supported on dips - especially against the euro and yen," ING said in a note.
The S&P 500 futures rose 0.2% and Nasdaq futures gained 0.4%, indicating more gains in store on Wall Street.
GRAPHIC: Core inflation seems to have peaked https://fingfx.thomsonreuters.com/gfx/mkt/byvrjykgdve/Pasted%20image%201660137870455.png
PPI NEXT STOP
Overnight on Wall Street, the S&P 500 rose more than 2%, while the Nasdaq Composite added 2.9%. The Nasdaq has now gained more than 20% from its June low.
"Rising real yields, due to the Fed's commitment to fighting inflation, have been an enormous problem for valuations in 2022, so any dovishness is seen as positive by the stock market, particularly for the highest valued companies," said Oliver Blackbourn, multi-asset portfolio manager at Janus Henderson Investors.
"However, the potentially more dovish outlook undermined a key support for the U.S. dollar."
U.S. policymakers left no doubt they would continue to tighten monetary policy until price pressures were fully broken.
San Francisco Fed President Mary Daly, in an interview with the Financial Times, warned it is far too early for the U.S. central bank to declare victory in its fight against inflation and a half-percentage point rate rise in September was her baseline.
Yields on U.S. Treasuries were slightly weaker at 2.7662%.
Oil prices eased as traders shifted attention back to more supply of crude entering the market coupled with weaker demand. Brent crude futures fell 0.13% to $97.27 a barrel, while U.S. West Texas Intermediate crude futures fell 0.09% to $91.83.
Spot gold eased 0.3% to $1,787 per ounce, pulling further away from a one-month high hit in the previous session. [GOL/]
MSCI's broadest index of Asia-Pacific shares outside Japan surged 1.4% to the highest in six weeks, buoyed by a 1.8% jump in Hong Kong, a 1.2% advance in South Korean shares and a 1.5% gain in China's blue chips.
Statement: The content of this article does not represent the views of FTI website. The content is for reference only and does not constitute investment suggestions. Investment is risky, so you should be careful in your choice! If it involves content, copyright and other issues, please contact us and we will make adjustments at the first time!
Tags:
Related articles
Tesla succession plan, vehicle demand in focus at annual meet By Reuters
{Current column}By Hyunjoo Jin and Tanya Jain(Reuters) -Tesla Inc CEO Elon Musk will be under pressure to address in ...
Read moreNike shares jump 8% after CEO change By
{Current column}(NYSE:) announced that Elliott Hill will take the helm as President and Chief Executive Officer effe ...
Read moreLatest NBC News national poll shows Harris leading Trump 49%
{Current column}-- The latest poll by NBC News reveals that Vice President Kamala Harris has gained noteworthy momen ...
Read more
Popular Articles
- U.S. stocks are falling as investors await CPI report for April By
- Nvidia falls as Beijing discourages local companies from buying Nvidia chips
- Fed's Goolsbee: Latest jobs report "superb"; more rate cuts ahead By
- Fed's big rate cut gamble risks policy error, inflation resurgence By
- Musk threatens to reassign NPR Twitter account, NPR says By Reuters
- Apple drops out of talks to join OpenAI investment round, WSJ reports By Reuters
Latest articles
-
U.S. stocks are falling as earnings reports disappoint By
-
Dell Technologies announces Dell AI for Telecom By
-
Why China's move is 'a game changer' By
-
XM.com Withdrawal Comprehensive Guide
-
Eleven killed in Russian strike, Ukraine rescue teams sift through wreckage By Reuters
-
'After the Fed put, comes the China put:’ Barclays By