Stocks shrug off rise in US inflation

Stocks are flat to slightly lower this morning after China’s May producer price index rose 9% over twelve months, higher-than-expected.

Stocks shrug off rise in US inflation

Stocks are edging higher in early trade this morning as investors react to US inflation data. US CPI rose 5% in May, more than anticipated, but the detail in the data seems to support the Fed’s view that the spike in inflation will be transitory. A poll of economists by Reuters indicated the majority expect the Fed to start cutting back its bond buying program early next year.

Data released today shows that UK GDP remains 3.7% below pre-pandemic levels. However, the economy expanded by 2.3% in April alone, and 1.5% in the three months to April, as lockdown restrictions were eased.

In Europe, the ECB said the pace of its Pandemic Emergency Purchase Programme would be “significantly higher” over the next quarter with Christine Lagarde warning against a “premature” reduction in support.


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