European Markets Have Increased
European markets were up as investors get ready for more inflation data this week, including the release on Thursday of the U.S. consumer price data for December.
Most industries and significant bourses reported gains, helping the pan-European Stoxx 600 index rise 0.6%. The largest increase was in retail stocks, up 1.7%, while insurance defied the upward trend and fell 1.1%.
To combat persistently high inflation, U.S. Federal Reserve Chairman Jerome Powell stressed the importance of the institution is free of political influence on Tuesday. Powell noted that stabilizing prices necessitates making difficult decisions that may be politically unpopular, a speech he gave to Sweden’s Riksbank. The French economy is holding up better than anticipated, so a “hard landing” should be avoided.
According to the Bank of France, the French economy probably expanded slightly in the fourth quarter of 2017 due to an uptick in business activity following the October refinery strikes and the restart of more nuclear plants.
Following the British insurer’s decision to cancel its final dividend for 2022, shares of Direct Line fell 29%, setting the company up for its biggest one-day decline ever.
During bad weather in Britain in December, the business claimed a spike in claims caused the insurer to post an annual underwriting loss. Vehicle repairs are now more expensive due to inflation and supply chain issues. Demand has increased due to unexpected hot and cold weather.
International Stocks Rise
On Wednesday, international stocks marginally increased on expectations that inflation was being controlled enough to slow the rate of interest rate increase and lessen the likelihood of a severe recession.
The dollar was stable as investors awaited Thursday’s consumer price index (CPI) report. Still, gold reached an eight-month high on bets that would reveal a slowdown in price increases.
While copper prices held close to 6-1/2 month highs on optimism over the economic reopening of top consumer China, crude oil prices recovered from early losses to move higher.