Global markets buoyant ahead of US inflation data

Investors awaiting January's inflation data in US set for Thursday release.

Global markets buoyant ahead of US inflation data

Global markets are buoyant ahead of US inflation data along with expectations that the hawkishness of central banks will not harm the economic recovery as much as feared.

Global investors are awaiting January's inflation data in the US on Thursday, with figures expected to show that prices rose 0.4% in January, for a 7.2% gain from a year earlier, which would be the highest in almost 40 years.

The possible effects of central banks' changing policy stances on asset prices continue to drive the markets.

While concerns that the economic recovery might be hampered by monetary tightening have been calmed by policymakers, local dynamics in stock markets came to the fore in pricing.

Analysts reported earnings generally met expectations in the ongoing balance sheet season around the world.

Stating that the inflation data to be announced Thursday in the US contains the risk of market volatility, they said developments in Ukraine and the threat of military conflict there also remain a focus of investors.

Before the US inflation data, the US 10-year bond yield stabilized at 1.95% after reaching its highest level since August 2019 with 1.97%.

Oil prices started the Wednesday down after a seven-week upward trend.

Crude is also under pressure from the resumption of Iran nuclear talks, with a deal probably seeing the country exporting oil again before the end of 2022.

On the European side, the verbal guidance of European Central Bank officials is in the spotlight. Yesterday, the Polish Central Bank increased the policy rate by 50 basis points to 2.75%, in line with expectations.

In Asia, risk appetite remains high, with the positive trend in the US markets and the news flow that state-backed funds are buying stocks in China.

However, the increased tension between China and the US and rising omicron cases are seen as the main risk factors.

Fears that China has not fulfilled its obligations under trade agreements signed during the term of then-US President Donald Trump would increase tension between the two countries.

Hüseyin Demir

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