According to the news report by Bloomberg, the consumer and technology stocks are what have kept the markets in the US up. The pound was boosted by the results of a key Brexit vote. Traders are now looking at central bank decisions that will be key in impacting the movements in the markets.
The S&P 500 index gained on Tuesday thanks to Apple, Amazon and Facebook leading the way in stock prices. However, overall trading volume was lower than the 30-day moving average. The 10-year Treasury yields went up and the Yen and gold went down after Kim and Trump signed a treaty promising to bring peace to the Korean peninsula.
The European STOXX 600 index went down after it showed modest gains and the Asian MSCI Asia Pacific Index also dropped.
Additionally, inflation figures in the US may even lead to the 4 interest rate hikes for 2018. Bloomberg reported that US inflation figures shot up in May in its quickest rise in more than 6 years. This reinforces the Fed’s outlook for an interest rate hike, while also cutting in on wage increases that have already been rather mediocre despite 18-year lows in unemployment.
According to the Labor Department report, the consumer price index (CPI) went up by 0.2% from May, and about 2.8% from a year ago, which was pretty much according to market estimates. However, this annual gain has been the highest since February of 2012. The core gauge rose by 0.2% after energy and food was excluded.
Based on these figures, the Federal Reserve is expected to raise interest rates on borrowing this week for the 6th time in 18 months, this trend in inflation is also expected to influence policy makers’ thoughts on the rate of interest rate hikes for the second half of 2018 and in 2019. Due to the expectation that interest rates are going to be raised, the dollar went up in value, which means the currencies in developing countries dropped in value.
In oil, the West Texas Intermediate benchmark went up after Iraq joined the fight with other OPEC members to increase global oil outputs.
Some of the main events to watch out for during the rest of this week are:
- Wednesday could see interest rates being hiked by the Federal Reserve.
- The European Central Bank will also give its decision on rate hikes in the European Union on Thursday after the bank’s president Mario Droghi gives a briefing.
- On Friday, the Bank of Japan will also issue its decisions on monetary policy in a news conference.
Here is the update on stock markets across the world:
- The S&P 500 went up by 0.2%
- The STOXX Europe 600 dropped by 0.1%
- The FTSE in the UK fell by 0.4%
- The German DAX fell but marginally by 0.05%
- The MSCI Emerging Market index went up by 0.1%
In currencies, the following are the updates:
- The US dollar went up by 0.1%
- The Euro fell less than 0.05% to trade at $1.1781
- The British pound gained 0.2% to trade at $1.3405
- The Yen went down by 0.2% to trade at ¥110.26 to the dollar. This is the weakest the Japanese currency has been in nearly 3 weeks
In commodities the week,
- The West Texas Intermediate benchmark went up by 0.5% to trade at $66.43 per barrel.
- Gold dropped by 0.3% to trade at $1,296.94 an ounce, which the biggest fall the precious metal has experienced the entire week.
- Copper fell by 0.5% to trade at $7,222 per metric ton.