In the US, consumer prices rose by +8.5% year-on-year in July. This means that the pace of inflation has slowed more than economists had anticipated (consensus +8.7%). As recently as June, the US inflation rate reached +9.1%, its highest level in over 40 years. The main reason for the easing was the decline in energy prices (-4.6% versus the previous month) and especially in gasoline prices in the US (-7.7%). However, food prices rose in July, up +1.1% on the previous month. The interest rate turnaround is also likely to have had a certain dampening effect. The core inflation rate, i.e. excluding energy and food prices, was +5.9% in July after +6.1% in June.
At midweek, investors on Wall Street showed relief in view of the decline in inflation and the prospect of a possible more moderate interest rate hike by the Fed in September. The Dow Jones Industrial closed +1.63% higher at 33,309.51 points and the S&P 500 gained +2.13% to 4,210.24 points. Among other things, the quarterly results of Walt Disney contributed positively. In particular, the subscriptions at the streaming business Disney+ were stronger than anticiapted. Even stronger were the daily gains on the Nasdaq, where the indices were +2.8% higher than the previous day.
In Asia, the stock indices followed most of the positive guidance from overseas. While the Japanese stock exchange remained closed for a holiday, the Hang Seng Index in Hong Kong rose +1.8% and the markets on the Chinese mainland also traded higher. The Shanghai Composite was up around +1.2% and the Shenzhen Component climbed around +1.6%.
The US dollar and capital market rates in the United States weakened after the release of US consumer price data. The euro rose above 1.03 against the greenback, the highest level since early July. On the US bond market, the yield on ten-year Treasuries stood at just under 2.8%.
Inflationary pressures in Germany intensified in July on an EU-harmonized basis. On a year-on-year basis, consumer prices rose by +8.5% in July, compared with an inflation rate of +8.4% in June. Compared to the previous month, the cost of living increased by +0.8% on average. Excluding the alignment with the European price index, the inflation rate in Germany declined to +7.5% in July from +7.6% in the previous month.
|14:30||US||Producer Prices (July, y/y)||+11.3%|
|14:30||US||Initial Jobless Claims (weekly)||260,000|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, E-Mail: email@example.com
Source: LGT Bank (Switzerland) Ltd.
Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is intended only for your information purposes. It is not intended as an offer, solicitation of an offer, or public advertisement or recommendation to buy or sell any investment or other specific product. The publication addresses solely the recipient and may not be multiplied or published to third parties in electronic or any other form. The content of this publication has been developed by the staff of LGT and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its correctness, completeness and up-to-date nature. The circumstances and principles to which the information contained in this publication relates may change at any time. Once published information is therefore not to be interpreted in a manner implying that since its publication no changes have taken place or that the information is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax or other matters of consultation, nor should any investment decisions or other decisions be made solely on the basis of this information. Advice from a qualified expert is recommended. Investors should be aware of the fact that the value of investments can decrease as well as increase. Therefore, a positive performance in the past is no reliable indicator of a positive performance in the future. The risk of exchange rate and foreign currency losses due to an unfavorable exchange rate development for the investor cannot be excluded. There is a risk that investors will not receive back the full amount they originally invested. Forecasts are not a reliable indicator of future performance. In the case of simulations the figures refer to simulated past performance and that past performance is not a reliable indicator of future performance.
The commissions and costs charged on the issue and redemption of units are charged individually to the investor and are therefore not reflected in the performance shown. We disclaim, without limitation, all liability for any losses or damages of any kind, whether direct, indirect or consequential nature that may be incurred through the use of this publication. This publication is not intended for persons subject to a legislation that prohibits its distribution or makes its distribution contingent upon an approval. Persons in whose possession this publication comes, as well as potential investors, must inform themselves in their home country, country of residence or country of domicile about the legal requirements and any tax consequences, foreign currency restrictions or controls and other aspects relevant to the decision to tender, acquire, hold, exchange, redeem or otherwise act in respect of such investments, obtain appropriate advice and comply with any restrictions. In line with internal guidelines, persons responsible for compiling this publication are free to buy, hold and sell the securities referred to in this publication. For any financial instruments mentioned, we will be happy to provide you with additional documents at any time and free of charge, such as a key information document pursuant to Art. 58 et seq. of the Financial Services Act, a prospectus pursuant to Art. 35 et seq. of the Financial Services Act or an equivalent foreign product information sheet, e.g. a basic information sheet pursuant to Regulation EU 1286/2014 for packaged investment products for retail investors and insurance investment products (PRIIPS KID).