• In US economic data, the Consumer Price Index (CPI) rose by
0.3% in April (survey: +0.2%) to be up 8.3% over the year (survey: +8.1%). Excluding food and energy (core CPI), prices rose by 0.6% in April (survey: +0.4%) to be up 6.2% on the year (survey: +6%).
• European sharemarkets climbed on Wednesday. The panEuropean STOXX 600 index rose by 1.7%, its biggest gain since late March, with consumer products and services stocks up 4.2%. German inflation in April rose to an annual 7.4% pace, its highest print since 1981 (survey: +7.4%). The German Dax index added 2.2% and the UK FTSE index gained 1.4%. In London trade, shares in Rio Tinto rose by 3.8% and shares in BHP gained 3.7%.
• US sharemarkets tumbled on Wednesday after US consumer prices data did little to ease investor worries over the outlook for inflation and interest rates. Federal Reserve Bank of Atlanta President Raphael Bostic said he’s open to “moving more” on interest rates to tame inflation. Shares of tech giants Apple (-5.2%), Meta Platforms (-4.5%), Netflix (-6.4%) and Tesla (-8.3%) all fell sharply.
The Dow Jones index closed down by 327 points or 1% after being up 423 points earlier in the session. The S&P 500 index fell by 1.7% and the Nasdaq index dipped 373 points or 3.2%.
• Longer-term US treasuries rose on Wednesday (yields lower) after data showed the pace of inflation slowed in April, but not enough to ease concerns that the US Federal Reserve’s agenda to cool rising prices may induce a recession. The US Treasury sold US$36 billion of 10-year notes at a yield of 2.943% into weak demand. US 10-year yields fell by around 6 points to near 2.93%. But US 2-year yields
rose by around 2 points to near 2.65%.
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• Major currencies were mostly weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0575 to lows near US$1.0508 and was near US$1.0510 at the US close. The Aussie dollar fell from highs near US70.51 cents to lows near US69.28 cents and was near US69.35 cents at the US close. But the Japanese yen firmed from 130.80 yen per US dollar to JPY129.47
and was near JPY130.00 at the US close.
• Global oil prices jumped by up to 6% on Wednesday. Covid-19 infections in Shanghai and Beijing dropped on Tuesday, boosting the crude demand outlook. In the US, the Energy Information
Administration reported that distillate inventories fell to the lowest since May 2005, while gasoline supplies in New York Harbour dropped to the lowest since 2017. The Brent crude price rose by
US$5.05 or 4.9% to US$107.51 a barrel. And the US Nymex crude price gained US$5.95 or 6% to US$105.71 a barrel.
• Base metal prices were mostly higher on Wednesday. Slowing Covid-19 infections in top metals consumer China eased near-term demand concerns. Zinc rose by 2.1% with copper up 1.3% and
aluminium 0.9% higher, but nickel fell by 2.1%.
• The gold futures price rose by US$12.70 or 0.7% to US$1,853.70 an ounce. Spot gold was trading near US$1,851 an ounce at the US close. The iron ore futures price gained US$3.93 or 3% to US$134.20 a tonne. Ahead: In Australia, data on overseas travel and payroll jobs & wages are scheduled. US producer prices figures are released.
Published by CommSec