On Wall Street, stock indices remained under pressure on Thursday, especially towards the end of the trading day. The Dow Jones Industrial closed at 31'730.30 points, -0.33% lower than the previous day, extending its year-to-date loss to nearly -13%. The broad-based S&P 500 fell by -0.13% and ended yesterday's trading at 3'930.08 points. On the Nasdaq technology exchange, the indices were able to hold and went almost unchanged out of trading. Since the beginning of the year, tech stock indices lost against the background of the interest rate turnaround in the US and the prospect of further rising interest rates about -25%.
The Asian markets, on the other hand, tended to the majority in positive territory at the end of the week. In Tokyo, the Nikkei 225 gains about +2.5% and in Hong Kong, the Hang Seng trades about +2% higher. In Shanghai, the Composite Index is up about +0.6%.
In the currency market, the US dollar continued to benefit from interest rate expectations and pushed the euro to 1.0375 – the lowest level since the beginning of 2017. The yield on ten-year US government bonds eased at the same time to 2.87%.
As with consumer prices, the momentum for producer prices in the US also eased minimally in April. On an annual basis, producer prices rose by +11.0% compared with a rate of increase of +11.5% in March. However, analysts on average had expected a slightly stronger decline to +10.7%. The development of producer prices flows into consumer prices with a time lag and thus has a significant influence on the direction of the US central bank.
As Bloomberg reported, some European Central Bank (ECB) council members are said to expect two more rate hikes by early next year, following a rate turnaround in July. This roughly mirrors the money market's assessment, which currently assumes three ECB rate hikes by the end of the year.
The Senate in Washington has confirmed Jerome Powell (69) for a second four-year term at the helm of the Federal Reserve by a large majority of 80 to 19. Powell has been Chairman of the Federal Reserve (Fed) since February 2018 and was nominated at the time by then President Donald Trump.
|08:45||FR||Consumer Prices (April, y/y)||+5.4%|
|09:00||ES||Consumer Prices (April, y/y)||+8.3%|
|11:00||EZ||Industrial Production (March, y/y)||+2.0%|
|14:30||US||Import Prices (April, m/m)||+2.6%|
|16:00||US||Consumer Sentiment (May)||65.2|
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Source: LGT Bank (Switzerland) Ltd.
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