Investors are waiting to see what implications the latest US inflation data will have on the prospects of an interest rate hike
London (AFP) - World stock markets were mixed Wednesday following the publication of key US inflation data as investors waited to see what implications it would have on the Federal Reserve’s plans to tighten monetary policy.
Traders were on tenterhooks for the release of minutes from the Fed’s most recent gathering and the start of the US earnings season, while fears of a global energy crunch continued to weigh on sentiment.
“All eyes today on the US CPI inflation number, minutes from the Fed’s last meeting and the start of earnings season with numbers due out from JPMorgan,” said Markets.com analyst Neil Wilson.
“Fed minutes will tell us more about how much inflation is a worry – we know the taper is coming, the question is how quickly the Fed moves to tame inflation by raising rates.”
US Labor Department data showed that inflation remained at a high 5.4 percent in September compared to the same month last year.
With the world’s top economy well on the recovery track, the US central bank has already signalled it will begin to wind back the massive financial support put in place at the start of the pandemic.
But supply chain bottlenecks, surging demand fuelled by reopenings and spiking fuel costs have sent inflation soaring in recent months, putting pressure on bank chiefs to act to prevent prices from running out of control.
An extended period of higher-than-targeted inflation is ramping up expectations that the Fed will have to lift interest rates after it has finished tapering its massive bond-buying programme.
In Europe on Wednesday, London stocks were back in positive territory in mid-afternoon. Earlier, data showed that the UK economy rebounded by 0.4 percent in August from July.
In the eurozone, Frankfurt’s main stocks index were up 1.0 percent and Paris added 0.7 percent.
Asian indices had also been mixed as concerns over a global energy crunch jangled nerves.
Tokyo, Sydney, Manila and Taipei edged down, though there were gains in Seoul, Singapore, Mumbai, Jakarta and Wellington. Hong Kong was closed because of a typhoon in the city.
Shanghai rose after better-than-forecast export data and ahead of Thursday’s release of China’s inflation data.
- Key figures around 1345 GMT -
New York - Dow: DOWN 0.3 percent at 34,275.86 points
London - FTSE 100: UP 0.1 percent at 7,139.78
Frankfurt - DAX: UP 1.0 percent at 15,296.21
Paris - CAC 40: UP 0.7 percent at 6,593.61
EURO STOXX 50: UP 0.9 percent at 4,092.47
Tokyo - Nikkei 225: DOWN 0.3 percent at 28,140.28 (close)
Shanghai - Composite: UP 0.4 percent at 3,561.76 (close)
Hong Kong - Hang Seng Index: Closed because of typhoon
Euro/dollar: UP at $1.1565 from $1.1530 at 2100 GMT
Pound/dollar: UP at $1.3636 from $1.3588
Euro/pound: DOWN at 84.82 from 84.86 pence
Dollar/yen: UP at 113.43 yen from 113.31 yen
Brent North Sea crude: DOWN 1.1 percent at $82.51 per barrel
West Texas Intermediate: DOWN 1.2 percent at $79.70 per barrel