Inflation in Germany breaks the record. OPEC+ countries will not pump more oil

The US Treasury bond yields jumped to a three-year high ahead of US inflation data. The Fed’s plan to curb inflation is subjected to additional analysis today. Analysts forecast the US inflation rate to show an increase of 8.4% year on year. The 10-year bond yields increased yesterday from 2.40% to 2.74%. Rising government bond yields tend to affect major stock indices negatively. At the end of the day yesterday, the Dow Jones Index (US30) decreased by 1.19%, the S&P 500 (US500) lost 1.69%, and the NASDAQ Technology Index (US100) fell by 2.18%.

Investors are looking forward to the start of the US earnings season, which begins on Wednesday with the release of companies from the banking sector. "Even if the US earnings season shows good earnings growth, we doubt companies will start revising their own forecasts upward," said Capital Economics economist Oliver Allen. "Because of this, we expect only a slight increase in the US stock market until the end of the year."

Yesterday, European stock markets were mostly declining. German DAX (DE30) fell by 0.64%, French CAC 40 (FR40) added 0.12%, Spanish IBEX 35 (ES35) decreased by 0.25%, British FTSE 100 (UK100) lost 0.67%. Germany's inflation rate in March 2022 was 7.3% year on year. Last month, the value was 5.1%. Thus, German inflation in March 2022 reached its highest level since the German reunification. The unemployment rate in the UK fell to 3.8%. This is a record since the last time the UK unemployment rate was below 3.8% in 1974. Vacancy rates hit a new record high for three months to March – 1.288 million, a reminder of the potential inflationary heat in the labor market that has the Bank of England on its guard as it raises interest rates. France's incumbent president Emmanuel Macron defeated rival Marine Le Pen in the first round of the presidential election on April 10. But the gap was narrow. France is currently preparing for a second round, held on April 24.

Finnish telecommunications equipment manufacturer Nokia announced its exit from the Russian market.

OPEC has told the EU that it is impossible to compensate for the potential loss of Russian oil supplies. Current and future sanctions against Russia could cause serious shocks to oil supplies in history, and these volumes cannot be offset. At the same time, OPEC countries will not fill the deficit by increasing production. OPEC is resisting calls by the United States and the International Energy Agency to increase oil production. OPEC opposes calls by the United States and the International Energy Agency to increase oil production. At the same time, EU representatives also noted that OPEC is responsible for balancing oil markets. However, OPEC has said that the current high market volatility results from "non-fundamental factors" beyond OPEC's control, so the group will not pump more. Currently, oil is not rising as quarantines imposed in China due to COVID-19 have briefly reduced demand prospects.

Stock indices of the Asia-Pacific region traded flat yesterday. Japan's Nikkei 225 (JP225) yesterday decreased by 0.61%, Australia's S&P/ASX 200 (AU200) gained 0.10%, while Hong Kong's Hang Seng (HK50) lost 3.03%. On the other hand, Chinese indices have strengthened as there are signs that some of the strict restrictions in Shanghai will be lifted.

Main market quotes:

S&P 500 (F) (US500) 4,412.53 -75.75 (-1.69%)

Dow Jones (US30) 34,308.08 -413.04 (-1.19%)

DAX (DE40) 14,192.78 -90.89 (-0.64%)

FTSE 100 (UK100) 7,618.31 -51.25 (-0.67%)

USD Index 99.99 +0.20 (+0.20%)

• – Japan Producer Price Index (m/m) at 02:50 (GMT+3);
• – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
• – German Consumer Price Index (m/m) at 09:00 (GMT+3);
• – German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – US Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US FOMC Member Brainard Speaks at 19:10 (GMT+3).

by JMarkets, 2022.04.12

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.