Stocks Rise Ahead of Inflation Data, Dollar Flattens

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: Global stocks rose on Tuesday ahead of U.S. inflation data that could justify an early end to the Fed’s rate hikes, while the dollar remained largely unchanged while China saw economic growth thrive. Expectations of support boosted prices of commodities such as oil and copper.

Markets will wait for Wednesday’s U.S. inflation data to see if price pressures continue to ease, which could provide clues to the interest rate outlook.

The Dow Jones Industrial Average rose 0.39% to $34,076.25, the S&P 500 rose 0.25% to $4,420.57 and the Nasdaq Composite rose 0.28% to 13,723.62.

The MSCI All-World Index rose 0.5% on the strength of European stocks, while the STOXX 600 Index rose about 0.75%.

Investors on Monday were digesting remarks from several Federal Reserve officials who said the central bank was nearing the end of the current cycle of monetary tightening, although inflation levels justified further rate hikes.

Economists polled by Reuters expect the consumer price index to rise 3.1% in June, following a 4% rise in May. This is the lowest level since March 2021. The core rate is expected to fall to 5% from 5.3% for the third month in a row, but still more than double the Fed’s 2% target.

Last week’s jobs report showed that far fewer jobs were added to last month’s nonfarm payrolls than expected, sparking a wave of US dollar selling, but interest rate expectations are unlikely to change course. was of little use.

“We take (market) moves relatively conservatively, especially when jobs and inflation are very close,” said Craig Earlham, market strategist at OANDA.

“Tomorrow’s inflation numbers will have a lot of attention. It’s too late for the July meeting,” he said. ‘ said.

Second-quarter earnings will also be on the radar as Wall Street’s biggest financial institutions, including JP Morgan, Citigroup and Wells Fargo, report results this week.

Analysts expect second-quarter earnings to fall 6.4% from a year earlier, according to IBES data from Refinitiv.

soaring dollar

The dollar index, which shows the performance of the US currency against six other currencies, was little changed on the day, near a two-month low, as yields on US Treasuries fell.

Currency strategists at Brown Brothers Harriman said in a note Tuesday that despite recent pressures, “the fundamental story continues to favor the dollar and markets still pose significant risks to the Fed’s second rate hike this year. I’m watching,” he said.

The benchmark 10-year bond yield fell two basis points to 3.988%, falling below 4% a day earlier.

“While there is mounting evidence of a near-term disinflationary trend, questions remain about whether inflation will persist at uncomfortably high levels over the medium term,” said Jim Reed, a strategist at Deutsche Bank. rice field.

The Japanese yen rose to a one-month high against the dollar and fell 0.4% on the day, following a fall in US Treasury yields.


Expectations of a boost to the Chinese economy overall boosted prices of industrial commodities such as oil, copper and iron ore.

Chinese regulators on Monday extended some of the relief measures introduced in November to boost liquidity in the troubled property sector.

Brent crude is struggling to break out of its 18-month low, rising 0.8% to $78.31 on the day. US crude rose 0.95% to $73.68 a barrel. Traders weighed supply cuts by the world’s largest oil exporter and a weak global economic outlook against expectations of rising demand from developing countries in the second half of 2023.

Gold prices hit a three-week high. Gold spot rose 0.33% to $1,930.69 an ounce.

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