The markets were seen trading in a modest risk off mode on Wednesday. This came after the U.S. administration threatened China with a fresh set of tariffs. The ongoing NATO summit in Brussels was also another cause for concern with President Trump accusing Germany being complicit with Russia over the gas pipeline proposal.
On the economic front, the data from the U.S. showed that producer prices index rose to a fresh six year high. On a month over month basis, headline PPI increased 0.3% while core PPI which excludes food and energy prices gained 0.2%.
Driving PPI higher was another month of strong gains from the energy prices.
The Bank of Canada held its monetary policy meeting where it raised rates by 25 basis points to bring Canada’s interest rates to 1.50%. The BoC also signaled that there was room for further rate hikes.
The European trading session today will kick off with the release of the German and French final inflation figures. According to the preliminary inflation reports headline CPI is expected to rise 0.1% respectively.
Later in the day, the ECB will be releasing its monetary policy meeting minutes. The minutes cover the June ECB meeting where policy makers announced a taper to the QE program and an exit from QE by December 2018.
The U.S. trading session will see the release of the monthly consumer price index data. Economists forecast that headline CPI is expected to rise 0.2% on the month while core CPI is expected to rise 0.2% on the month as well.
