In US economic data, the producer price index (PPI) rose by 1.1% in June to be up by 11.3% on the year (survey: +10.7%). The core PPI (ex-food and energy) rose by 0.4% in June to be 8.2% higher on a year ago (survey: +8.2%). Initial jobless claims rose by 9,000 to an 8-month high of 244,000 last week (survey: 235,000).

European sharemarkets closed lower on Thursday. The panEuropean STOXX 600 index fell by 1.5% with basic resources shares down 3.8%. Italy’s FTSE MIB index sank 3.4% after Italian Prime Minister Mario Draghi resigned with his coalition government collapsing. The German Dax index slid 1.9% and the UK FTSE index shed 1.6%. In London trade, shares of Rio Tinto fell by 4.7% and BHP shares slipped 3.5%.

US sharemarkets closed mostly lower on Thursday following the release of disappointing earnings results. Shares of JPMorgan Chase (-3.5%) and Morgan Stanley (-0.4%) both fell after the US banks reported a slump in quarterly profits and warned of an impending US economic slowdown. Food group Conagra Brands’ shares tumbled 7.3% after issuing a disappointing annual earnings forecast. But shares of Apple were up by 2.1%. The Dow Jones index fell by 143 points or 0.5% and the S&P 500 index slid 0.3%. But the Nasdaq index added 4 points or less than 0.1%.

US treasuries were mixed on Thursday. US Federal Reserve Governor Christopher Waller and St. Louis Federal Reserve Governor James Bullard said they favoured another 75 basis point interest rate increase in July, easing jitters over an even bigger, 100 basis point hike. US 10-year yields rose by around 5 points to near 2.96% but US 2-year yields fell by around 1 point to near 3.14% with the yield curve extending its inversion.

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0047 to lows near US$0.9950 and was near US$1.0010 at the US close. The Aussie dollar fell from highs near US67.77 cents to lows near US66.81 cents and was near US67.45 cents at the US close. And the Japanese yen eased from near 138.36 yen per US dollar to JPY139.37 and was near JPY138.90 at the US close.

Global oil prices fell by 0.5% on Thursday as traders focused on the prospect of a large US rate hike that could stem inflation but at the same time hit oil demand. The Brent crude price fell by US47 cents or 0.5% to US$99.10 a barrel. And the US Nymex crude price shed US52 cents or 0.5% to US$95.78 a barrel.

Base metal prices fell on Thursday as investors braced for rapid interest rate rises that will slow economic growth and reduce demand for metals. Lead dropped 5.9% and nickel dipped 8.3%.

The gold futures price fell by US$29.70 or 1.7% to US$1,705.80 an ounce. Spot gold was trading near US$1,709 an ounce at the US close. The iron ore futures price slid US$5.30 or 4.8% to US$104.96 a tonne as Chinese authorities grappled with a wave of mortgage boycotts sweeping the property sector.

Ahead: In China, economic growth (GDP), retail sales, industrial production and fixed asset investment data are all due. In the US, retail sales, industrial production, manufacturing, consumer confidence and import/export prices data are all scheduled.

Originally published by CommSec