As investors prepared for a highly anticipated U.S. inflation report, most global benchmarks advanced on Thursday.
In early trading, the CAC 40 rose 1.0% to 7,396.40, while the DAX rose 0.5% to 7,396.40. The FTSE 100 increased nearly 0.1% to 7,591.98. Dow futures were up 0.5% at 35,373.00, indicating that U.S. stocks were likely to rise. Futures for the S&P 500 rose 0.5% to 4,509.25.
Later in the day, the government of the United States will release its monthly update on consumer inflation. Economists anticipate an increase to 3.3% in July, up from 3% in June. Tina Teng, a market analyst at CMC Markets, referred to the approaching update as a pivotal event for global markets.
The Nikkei 225 gained 0.8% to conclude at 32,473.65 points. The S&P/ASX 200 in Australia increased 0.3% to 7,357.40. The Kospi declined 0.1% to 2,601.56. The Hang Seng was essentially unchanged, rising less than 0.1% to 19,248.26. The Shanghai Composite index increased by 0.3% to 3,254.56.
The decision by U.S. Vice President Joe Biden to block and regulate high-tech U.S. investments in China weighed heavily on Chinese sentiment.
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Vice President Biden issued a directive on improved computer processors, microelectronics, quantum information technologies, and artificial intelligence on Wednesday.
The order aims to limit the capacity of China to make use of U.S. investments in the nation’s technology firms to upgrade its military, while preserving trade levels vital to the economies of both nations.
Officials of the U.S. Federal Reserve has repeatedly stated that their future judgments regarding interest rates will depend on the most recent economic data, particularly concerning inflation and the labor market.
A much worse-than-anticipated increase in inflation could raise concerns that the Fed’s work in combating inflation is not yet complete and that it may need to continue raising interest rates. It could at least force the Fed to maintain elevated interest rates for longer than anticipated.
High interest rates reduce inflation by stifling the economy as a whole and decreasing investment prices. The Fed’s federal funds rate has already reached its greatest level in more than two decades. Historically, rate increases take a long time to have a full impact on the economy, so the danger of a recession remains.
In energy trading, the price of U.S. benchmark crude rose 13 cents to $84.53 per barrel. Brent crude, the international benchmark, rose 21 cents per barrel to $87.76.
The U.S. dollar rose to 143.79 Japanese yen from 143.67 yen in currency trading. From $1.0979 to $1.1024, the euro cost $1.1024.
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Source: AP News
