- World stock markets are trading mostly up today. European markets are continuing their attempt to offset declines from earlier in the month with the leading French index trading up about 0.8% today. Germany's DAX is also rallying, rising 0.4%, and the Stoxx Europe 600 is up about 0.5%.
- Investors' fears of a recession continue to ease, with today's CPI data from the US proving to be a “spot-on” reading. The price growth rate of 2.9% fell to its lowest level since 2021, and also turned out to be slightly below forecasts.
- Nonetheless, the market did not descend into extreme euphoria, with US indices trading at neutral levels (the S&P 500 is up about 0.22%, and the Nasdaq 100 is trading at a slight discount of 0.25%).
- Gold is losing more than 1% during the second phase of Wednesday's session after CPI data from the US showed that inflationary pressures in the US are not falling as fast as many would like.
- Markets now see a 41% chance that the Fed will cut interest rates by 50 basis points in September, compared to 50% before the release. The market is taking a more cautious stance, which is further supported by recent hawkish comments from Fed bankers.
- Eurozone GDP remained in line with consensus. More interesting information was published in data parallel to economic growth. Industrial production scores a decline in monthly growth and is below expectations. Unemployment remains lower than the previous reading.
- GBP took a hit following the UK CPI inflation report for July. Actual report turned out to be a dovish surprise with headline price growth accelerating less than expected and core price growth slowing more than expected. Both monthly readings also came in lower than expected. Money markets are now pricing in an almost 50% chance of BoE delivering a 25 basis point rate cut at September meeting, up from around 35% before the CPI data release.
- Natural gas (NATGAS)-based contracts are gaining more than 2.5% during Wednesday's session as the supply-demand imbalance for the commodity continues. Despite large gas inventories in the U.S., data for the past few days indicate that the rate of shrinkage is increasing relatively quickly. The supply-demand balance came out below the range of the 5-year average this week, and the demand for gas itself in the context of electricity generation is growing.
- Declines dominate the crypto market. Bitcoin is currently losing nearly 3% and Ethereum 2.5%.
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