AP – Global shares gained yesterday as traders looked ahead to a key report on inflation that could influence the Federal Reserve’s (Fed) next move on interest rates.
France’s CAC 40 slipped 0.4 per cent in early trading to 7,503.63, while Germany’s DAX added 0.6 per cent to 18,312.62. Britain’s FTSE 100 edged up 0.4 per cent to 8,210.54.
The future for the Dow Jones Industrial Average was up nearly 0.1 per cent and that for the S&P 500 rose 0.3 per cent.
In Asia, Japan’s benchmark Nikkei 225 rose 0.6 per cent to finish at 39,583.08. Australia’s S&P/ASX 200 rose 0.1 per cent to 7,767.50. South Korea’s Kospi edged 0.5 per cent higher to 2,797.82. Hong Kong’s Hang Seng was little changed, inching up less than 0.1 per cent to 17,718.61, while the Shanghai Composite surged 0.7 per cent to 2,967.40.
In Japan, the government reported industrial production was stronger than forecast in May at 2.8 per cent and the unemployment rate was unchanged from the previous month at 2.6 per cent.
On Thursday, the S&P 500 edged up 0.1 per cent and the Nasdaq composite added 0.3 per cent. The Dow Jones Industrial Average rose 0.1 per cent.
The United States (US) stock market has been listless this week in the lead up to yesterday’s release of the next influential inflation report from the government. The personal consumption expenditures index, or PCE, is the Fed’s preferred measure of inflation.
Economists expect the report to show a modest easing of inflation to 2.6 per cent in May, following a 2.7 per cent reading in April. That’s down from the PCE’s peak of 7.1 per cent in the middle of 2022. Other measures of inflation, including the consumer price index, have also eased significantly over the last two years.
The latest updates on inflation could influence the central bank’s decision on when to begin cutting interest rates, which remain at their highest level in more than 20 years and which are having an impact worldwide. Wall Street is betting that the central bank will start cutting interest rates at its September meeting.
An update from the government said the American economy expanded at a 1.4 per cent annual pace from January through March. The figure is a slight revision from a prior estimate of 1.3 per cent. It marks the slowest quarterly growth since spring 2022.
A slowdown in consumer spending could help further ease inflation, but too much of a slowdown could result in a more painful hit to the economy. The Fed is trying to time its efforts tame inflation back to its two per cent target without slowing the economy so much that it slips into a recession.
In energy trading, benchmark US crude rose 81 cents to USD82.55 a barrel. Brent crude, the international standard, added 77 cents to USD86.03 a barrel.
In currency trading, the US dollar fell to JPY160.73 from JPY160.77. The euro cost USD1.0710, up from USD1.0704. Wall Street is betting that the central bank will start cutting interest rates at its September meeting.
An update from the government said the American economy expanded at a 1.4 per cent annual pace from January through March.
