In US economic data, the consumer price index (CPI) fell 0.1% in December (survey: -0.1%), the first decline since May 2020. Annual growth eased from 7.1% to 6.5% in December (survey: +6.5%). The core CPI (ex-food and energy) rose 0.3% in December (survey: +0.3%). Annual growth of the core CPI fell from 6% to 5.7% in December (survey: +5.7%). Initial jobless claims fell 1,000 to 205,000 last week (survey: 215,000).
European sharemarkets ended higher on Thursday, hovering near 9-month highs, as US inflation data showed signs of moderating last month. Retail stocks led gains, up 1.9%. The continent-wide FTSEurofirst 300 index lifted 0.6%. And the UK FTSE 100 index was up 0.9%, continuing to push toward an alltime high after surpassing 7,800 points during the trading session for the first time since May 2018.
US sharemarkets rose on Thursday as cooling US consumer inflation supported bets of smaller interest rate hikes by the US Federal Reserve. That said, investor concerns remained that the central bank was not close to pausing its policy tightening. American Airlines shares soared 9.7% after raising its fourthquarter profit forecast. United Airlines shares jumped 7.5%. At the close of trade, the Dow Jones index rose 217 points or 0.6%. The S&P 500 index gained 0.3%. And the Nasdaq index added 69 points or 0.6%.
US government bonds rose sharply on Thursday (yields lower) as investors digested a key inflation report that showed a small decline in US consumer price pressures. Federal Reserve Bank of St. Louis President James Bullard said the US central bank should raise interest rates above 5% “as soon as possible.” But Federal Reserve Bank of Philadelphia President Patrick Harker said rate hikes of a quarter-percentage point “will be appropriate going
forward.” The US Treasury sold US$18 billion of 30-year notes at a yield of 3.585% into strong demand. US 10-year Treasury yields fell 13 points to near 3.43%. And US 2-year Treasury yields dropped 10 points to near 4.13%.
Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.0739 to highs near US$1.0864 and was near US$1.0850 at the US close. The Aussie dollar lifted from lows near US68.86 cents to highs near US69.84 cents and was near US69.70 cents at the US close. And the Japanese yen firmed from near 131.89 yen per US dollar to around JPY128.94 and was near JPY129.20 at the US close.
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Global oil prices climbed more than 1% on Thursday. Growing confidence in China’s economic recovery and mounting evidence of cooling US inflation buoyed crude prices for a sixth day. The Brent crude oil price rose US$1.36 or 1.6% to US$84.03 a barrel. And the US Nymex crude oil price added US98 cents or 1.3% to US$78.39 a barrel.
Base metal prices advanced on Thursday. Copper rose 0.4% to a 7-month high after US consumer prices fell, brushing aside worries by investors that recent gains had been overdone amid lacklustre physical demand. And aluminium lifted 1.8%.
The gold futures price rose US$19.90 or 1.1% to US$1,898.80 an ounce, near its highest level since May 2022. Spot gold was trading near US$1,899 an ounce at the US close. Iron ore futures lifted US24 cents a tonne or 0.2% to a
fresh 6-month high of US$121.26 a tonne.
Ahead: In Australia, lending indicators are scheduled. In China, international trade figures are due. In the US, import and export prices are released with consumer confidence data. JPMorgan, Bank of America, Citigroup, Wells Fargo and Delta Airlines are set to report quarterly earnings.
Originally published by CommSec