Finance News, Stocks

Stock Market Relieved As Positive Inflation Data Expectancy Grows

While the Federal Reserve prepares to release information on inflation, most stock markets witnessed improvement, beginning with Asia. The USD rests below a recently registered high. All the same, analysts believe chances are that inflation may have heightened.

Stocks Performance In Recent Days

S&P 500 maintained its position in the market, likewise NASDAQ futures. On the other hand, European stocks sank as the market endured pressure from bears. Europe could be in for a down-beat momentum.

KOSPI futures of South Korea registered a pump of 2.6%. Following was ex-Japan shares, which saw a 0.8% increase. Also, 0.2% got added to the Nikkei, one of Japan’s top shares. 

According to analysts, MSCI jumped out of a 2-year low within four days of a consecutive pump. The MSCI attained this low in 2020 when the bear market hit. It has since lingered there until four days ago.

USOIL price poises under $90 per barrel. Marking a 30% decline from its rate in mid-June and more or less its position before the Russia-Ukraine war. Nonetheless, Wall Street recorded gains throughout four trading sessions.

Has Inflation Dwindled?

Economic watchers in the United States said that regardless of the developments registered by stocks, the FED is yet to confirm the current inflation rate. However, they suppose inflation may have stepped further, therefore, warning of imminent repercussions if the case is so.

Rob Carnell, an ING economist, expressed his opinion regarding the situation. He claimed that it was too soon to bid inflation farewell. Furthermore, stating that market players best wait for the FED to confirm its status to avoid winding up at the receiving end of it. 

As the FOMC meeting approaches, several entities begin looking forward to the US easing up on its tight inflation directive. 

Kristina Clifton, a top economic official at CBA, said that the FED would reduce basis points by 50bps at the meeting if there is a drop in the inflation rate. Otherwise, there is a possibility it gets set at 75bps. 

According to interest rate futures, there is a high possibility that FED would increase basis points up to 75bps. If that happens, another bear season may waltz in. The general expectation is a 0.3% increase above August. 

Currencies Performances

The USD fell off its latest high by 0.7%, having maintained its index at 108.16 against several indexes. The euro equivalent to the dollar is $1.0127 after a nudge upward. 

Japanese yen recovered from the severed market condition, pulling up at 142.5 to one dollar. Last week, it was at a twenty-four-year low at 144.99. Some Japanese investors believe it will fall back into a further slump if the government intervenes. 

The US Treasury records a boost on returns after making massive sales. Its thirty-year returns on sales increased by 3.5%. 

Gold retained its position at $1,722 per unit.

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