Investors await US inflation data, European stock markets remain stable

European stock markets are stable and close to record highs as investors wait for US inflation data on Friday, which may force the Fed to reconsider its ultra-loose monetary policy.

The Stoxx 600 index rose 0.1% in early trading, while the UK’s FTSE 100 index was flat. The inflation survey followed a weakening of US government bonds, which is expected to show that core personal consumption expenditures (PCE) in the US rose to the highest level in nearly three decades last month. The yield on the 10-year U.S. Treasury bond, which is inversely proportional to the price of the 10-year U.S. Treasury bond, increased by 0.02 percentage points to 1.589%.

Core PCE is the Fed’s favorite measure of inflation. It eliminates fluctuations in food and energy prices. It is expected to increase by 2.9% year-on-year by April, which is the strongest annual growth since 1993.

Many economists believe that inflation is being pushed up by inflation. Temporary factors The industry reopened following the suspension of the pandemic last year. However, analysts and investors will be wary of price increases that are large enough to persuade the Federal Reserve (Fed) (the world’s most influential central bank) to postpone its monetary stimulus measures during the crisis period in order to get overheated earlier than currently expected The economy is cooling down. .

Samy Chaar, chief economist at private bank Lombard Odier, said: “We may see an increase in temporary factors.” “For example, hotels, cars, air tickets, etc. in catch-up mode.”

He added that the US job market may be a more important barometer of long-term inflation. “If the labor market is tightening, you will face wage pressure, and at some point, as people adjust consumption, price pressure will follow.”

In the United States, the unemployment rate is as high as 6.1%. Data from late Thursday is expected to show that the number of new unemployment benefits fell to a new pandemic-era low of 425,000 last week.Higher unemployment benefits and fear of the virus lead to Labor shortage And prompt some American companies to provide higher wages.Last month, McDonald’s (McDonald’s) franchise in Florida provide Pay $50 to anyone participating in a job interview.

At the same time, Fed officials have changed the tone of their communication from insisting that it is too early to discuss and discuss cutting the central bank’s monthly bond purchases of $120 billion to a debate on reducing its support for financial markets in times of crisis.

Fed Vice Chairman Randal Quarles (Randal Quarles) Say On Wednesday, even after a “temporary factor discount,” the US inflation rate since December will still be “sufficient to prove” that it is worth reducing asset purchases in the second half of 2021.

In terms of currency, the euro rose 0.1% against the US dollar to 1.2205 US dollars. The pound also rose 0.1% to 1.4132 US dollars. The U.S. dollar index, which measures the U.S. dollar against major currencies, has stabilized near its lowest point in 2021.

The exchange rate of China’s onshore renminbi against the US dollar continued to rise, rising by 0.3%. One unit of U.S. dollar can buy 6.375 yuan, which is the lowest level in three years.

Asian stock markets weakened, Japan’s Nikkei 225 Index and Hong Kong’s Hang Seng Index both closed down 0.3%. The global oil benchmark Brent crude fell 0.6% to 68.43 US dollars per barrel.

Source link