Inflation in the United States slows down. The Fed will not reduce the quantitative easing program

Last week the number of new jobless claims was 375,000 (previously 387,000) in the US. The labor market is slowly recovering. In July, the US producer price index increased more than expected as high inflation and strong demand, driven by the economic recovery, continue to damage supply chains. The producer price index increased by 7.8% within the last 12 months; this is the highest value since 2010. The US stock market ended Thursday's trading in growth due to strengthening health care, technology, and consumer goods sectors. The Dow Jones and S&am;P 500 reached new all-time highs for the third session in a row. Inflation data remains the main leverage of the US Federal Reserve now. Although inflation in the United States has slowed down, the Fed will not reduce the quantitative easing (QE) program. Therefore, the major US indices are likely to continue rising until the next inflation statistics.

European stock indices were trading without a single trend yesterday. German DAX jumped by 0.7%, French CAC 40 increased by 0.36%, Italian FTSE MIB added 0.38%, and Spanish IBEX 35 remained at the same level. At the same time, the British FTSE 100 decreased by 0.37%. The main reason for the decline of the British index was the negative statistics on industrial production. Strong corporate reporting from European companies still compensates investors' concerns about the spread of the Delta strain.

Gold prices increased in the US trading session yesterday. It is important to keep an eye on US government bond yields to predict gold prices. As long as the US Federal Reserve keeps printing money, this fundamental picture plays in favor of rising precious metals prices. But do not expect a strong rise, as gold does not have the same protective asset value now as it did before.

The International Energy Agency (IEA) lowered its forecast on global demand for the commodity this year. Demand for oil in China (the largest consumer of fuel) is declining due to restrictions. After the news, oil prices slightly decreased yesterday.

Most Asian stock indices continue to ignore record highs in the US stock market. The broadest index of Asia-Pacific stocks outside of Japan, the MSCI, decreased by 0.59%, Japan's Nikkei 225 fell by 0.6%, and China's CSI300 decreased by 0.21%. However, Australia's ASX 200 index increased by 0.53% to a new record due to the growth of medical and technological companies. In Korea, shares of Samsung Electronics fell to a seven-month low due to concerns about lower revenue for the next quarter.

Main market quotes:

S&P 500 (F) 4,460.83 +13.13 (+0.30%)

Dow Jones 35,499.85 +14.88 (+0.04%)

DAX 15,937.51 +111.42 (+0.70%)

FTSE 100 7,193.23 -26.91 (-0.37%)

USD Index 93.01 +0.09 (+0.10%)

• – US Prelim Michigan Consumer Sentiment at 17:00 (GMT+3).

by JMarkets, 2021.08.13

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.