Key Points
- The U.S. announced on July 12 that its annual inflation had fallen to 3% lower than the expected 3.1%
- Thursday, markets saw Europe stocks open higher following the news.
- More pain is expected in the Eurozone as further interest rate hikes are needed, and BoE expects mortgage payments to be hiked.
Europe stocks have opened higher, with Stoxx 600 up 0.67% at 13:20 London time on July 13. The tech stocks were also up 1.5%, with almost each other sector trading in green.
Europe stocks get a spike though the U.K. economy contracted in May
The U.K. economy is left behind by its west counterpart, the U.S. The U.S. reported strong market data in June, with its inflation falling to the lowest point since 2021. On the other hand, the U.K. reported a contraction of 0.1% in May.
International markets are, however, expecting a 90% possibility of July seeing a rates hike in the U.S. However, a smoother way ahead may be inbound for the U.S., as it was expected that only two more hikes could be necessary this year. As such, markets are reacting well to the information.
Shortly after the news of the falling inflation rates in the U.S. hit the headlines, the STOXX 600 rose by 1.5%, showing more hope among traders, at the same time. The S&P 500 closed Wednesday at its highest level since April 2022.
The U.S. Producer Price Index was released on July 13, 2023, detailing that the final demand increased by 0.1% in June. Concurrently, the Prices for final demand services rose 0.2 percent in the same period.
Keep watching Fintech Express for more updates on macro-finance and other fintech-related developments.