Daily summary: Inflation spooks US equities

• US inflation for April well above expectations

• European stocks mostly higher, US equities tumble

• Oil prices push higher, Brent and WTI up 1.5%

European stock indices finished Wednesday's session mostly higher. The German blue chip stock market index added 0.20% while French CAC 40 gained 0,19%. The British FTSE 100 rose 0.82% and returned above the 7,000 pts mark. On the other hand, inflation fears spooked US equites and major indices are currently trading lower. The S&P 500 (US500) slumps 1.70% while Nasdaq (US100) tumbles more than 2%. 

US inflation report was the most awaited event of the day. The data showed that inflation rose as much as 4.2% YoY in April, well above estimates. On the flip side, CPI data from European countries, released in the morning, was more or less in-line with expectations. US crude oil inventories fell less than expected (-0.43 mb vs exp. -2.82 mb). Oil prices continue to move higher with both Brent and WTI gaining roughly 1.50%. Precious metals fell sharply following US CPI data as US Treasury 10-year yield spiked to highest level since mid-April. 

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As far as tomorrow’s European session is concerned, the calendar will be light. However, markets will pay attention to important set of data from the US - initial jobless claims and PPI inflation for April. As inflation gets more and more attention these days, the latter will certainly be closely watched. 

US30 is getting very close to an important support zone as the market-selloff in the US continues. As one can notice on the chart above, the area near 33,650 pts served as a support several times before. Even though the Dow remains the most resilient among major US indices, US30 is tumbling more than 1% today. Source: xStation5

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