Markets await US inflation data.. a combined rise in stocks, gold and oil

Global markets saw a collective rally today, Monday, as oil, gold and European shares rose, supported by various factors, while US inflation data was awaited.

Global markets await US inflation data or the consumer price index to be released on Wednesday, August 10.

Expectations suggest that inflation will fall to 8.6% in July, after recording 9.1% in June.

Oil prices rose about 2% in choppy trade on Monday, recovering from multi-month lows touched last week, as positive economic data from China and the United States fueled hopes for demand despite lingering recession fears.

Oil is rising again

International benchmark Brent crude futures ended the trading session up $1.73, or 1.8%, at $96.65 a barrel.

U.S. West Texas Intermediate crude futures fell $1.75, or 1.97%, to settle at $90.76 a barrel.

Last week, fears that a recession could undermine demand for energy pushed Brent contracts down 13.7% to their lowest level since February. It was the biggest weekly loss for Brent since April 2020, while US crude fell 9.7%.

Both benchmarks recovered in today’s session from the losses they suffered on Friday after a report showed stronger-than-expected job growth in the United States, the world’s largest consumer of crude oil, in July.

A mood of optimism prevailed in the markets after data indicated faster than expected growth in Chinese exports.

Customs data showed China, the world’s biggest crude importer, bought 8.79 million barrels of oil per day in July, up from a four-year low in June but still 9.5% below its level a year ago.

In Europe, Russia’s exports of crude and oil products continued to flow ahead of an expected ban from the European Union that will take effect on the fifth of December.

As for production in the United States, last week energy companies cut the number of oil rigs at the fastest pace since September, the first decline in ten weeks.

Analysts at investment bank Goldman Sachs said they believe the drivers of oil prices are still strong, with a larger supply shortage in the markets than they had expected in recent months.

Gold rises

Gold prices rose today as yields on the dollar and U.S. Treasuries fell while investors’ focus shifted to U.S. inflation data due this week and could affect the Federal Reserve’s rate hike plan.

And spot gold rose 0.82% to $1788.60 an ounce, and US gold futures rose 0.7% to $1804.20.

The dollar index fell 0.3%, making the yellow metal more attractive to buyers of holders of other currencies. US Treasury yields also fell.

All eyes are now on the US CPI report due out on Wednesday. Analysts polled by Reuters had expected annual inflation to fall to 8.7% in July from 9.1% the previous month.

European stocks

European shares posted their best day in nearly two weeks today after suffering losses last week as a strong US jobs report rekindled bets on another big rate hike from the Federal Reserve.

The pan-European Stoxx 600 index ended the trading session 0.8% higher. Almost all sectors rose, especially those sensitive to the performance of the economy, such as financial services and the automotive industry.

The focus now falls on inflation data in the world’s largest economy expected on Wednesday. Global stock markets were rocked on Friday after data showed a strong increase in US employment, undermining hopes that the Federal Reserve could ease the pace of a series of interest rate hikes to tame accelerating inflation.

After ending July with gains of more than 7%, the Stoxx 600 has struggled this month to extend momentum amid concerns over gloomy economic data, rising geopolitical tensions and fears that interest rates could tip the economy into recession .

Wall Street divergence

Major U.S. stock indexes were little changed on Monday after strong jobs data last week bolstered expectations that the Federal Reserve would continue its crackdown on inflation, while a profit warning from chip maker Nvidia revived fears of a slowing U.S. economy.

Stocks retreated from highs reached earlier in the session as the market initially viewed the strong jobs report as a sign that the economy could withstand significant interest rate hikes by the US Federal Reserve to tame inflation that hit its highest level in four reached decades.

Investors now await Wednesday’s consumer price data to determine whether the Federal Reserve will somewhat ease its fight against inflation and create a better environment for economic growth.

According to preliminary data, the benchmark Standard & Poor’s 500 index ended the trading session on Wall Street, up 5.19 points, or 0.13%, to 4140.00 points, while the Nasdaq Composite Index gained 12.12 points, or 0 .10%, fell to close at 143,645 points. .

The Dow Jones Industrial Average closed up 30.76 points, or 0.09%, at 3,2834.23 points.

The Standard & Poor’s 500 is up 14% from its mid-June lows. But signs of a fast pace of inflation could strengthen the Fed’s case for strong monetary tightening.

The information technology sector fell due to a loss in chip maker Nvidia, while the company warned that it expects second-quarter revenue to fall 19% from the first quarter to $6.7 billion due to weakness in its gaming business .

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