The US stock markets closed in the red zone yesterday, breaking the longest (8 consecutive sessions) series of records since 1997. By the end of the day, the Dow Jones Industrial Average decreased by 0.31%, the S&P 500 fell by 0.35%, and the Nasdaq lost 0.6%. Macroeconomic data released on Tuesday showed a slight increase in the pace of producer price inflation in October to 0.6% from 0.5% in September. In annual terms, the US producer inflation is rising at a record pace. The US inflation data will be released today. Experts believe US inflation will rise slightly. But if the actual value is much worse than expected, the dollar index may react sharply as the Fed is ready to speed up the pace of stimulus cuts if necessary.
European stock indexes also decreased on Tuesday. The British FTSE 100 fell by 0.36%, the German DAX lost 0.04%, the French CAC 40 decreased by 0.06%, the Italian FTSE MIB lost 0.97%. The exception was the Spanish IBEX 35, which increased by 0.05%. The ECB balance sheet continues to grow rapidly. Total assets rose by another €16.6 billion to a new level of €8,382.7 billion. The ECB will continue to print money as part of its stimulus program until the end of the year. German exports fell by 0.7% in September compared to August, according to data from the country’s Federal Statistics. But the index of economic sentiment in Germany and the Eurozone is growing again. Experts forecast renewed economic growth and lower inflation in both Germany and the Eurozone in the first quarter of 2022. Germany will release its inflation report today.
The drug regulator in the EU will soon approve Regeneron-Roche drugs against COVID-19.
The European Union decided to partially suspend the visa facilitation agreement between the EU and Belarus due to the influx of migrants.
Yesterday, oil prices grew amid American Petroleum Institute (API) data on energy reserves in the US, which showed an unexpected decline of oil reserves in the US last week. Today, the US Department of Energy will release an official report on US crude oil and natural gas inventories. Usually, natural gas inventories are released on Thursdays, but tomorrow is a bank holiday in the US. So, the report will be published today.
The price of gold is trading near a two-month high due to declining US bond yields. Investors are waiting for key US inflation data today. Rising inflation could cause the US dollar to strengthen on the expectation that the US Federal Reserve will accelerate the pace of QE cuts. A rise in the dollar index will lead to higher government bond yields and lower gold prices.
China’s consumer inflation accelerated in October to its highest in 13 months since September 2020. The inflation rate reached 1.5% in annual terms. Experts predicted inflation at 1.4%. At the same time, China’s producer price index jumped to 13.5% in annual terms amid rising prices for coal and other raw materials used by power plants. That has been the highest level since 1996. Asia-Pacific stock markets are decreasing on inflation data in China. Japan’s Nikkei 225 index decreased by 0.61%, Hong Kong’s Hang Seng decreased by 0.98%, Shanghai’s Shanghai Composite lost 0.94%, and Australia’s ASX 200 decreased by 0.14%.
Main market quotes:
- S&P 500 (F) 4,685.30 −16.40 (−0.35%)
- Dow Jones 36,320.04 −112.18 (−0.31%)
- DAX 16,040.47 −6.05 (−0.04%)
- FTSE 100 7,274.04 −26.36 (−0.36%)
- USD Index 93.98 −0.07 (−0.08%)
Important events for today:
- Canada BoC Gov Macklem’s Speech at 00:45 (GMT+2);
- China Consumer Price Index (q/q) at 03:30 (GMT+2);
- China Producer Price Index (q/q) at 03:30 (GMT+2);
- German Consumer Price Index (m/m) at 09:00 (GMT+2);
- US Consumer Price Index (m/m) at 15:30 (GMT+2);
- US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
- US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
- US Natural Gas Storage (w/w) at 19:00 (GMT+2).
