Annual U.S. consumer prices rose 9.1 percent in June, the largest increase in more than four decades, prompting Americans to step up to pay for gasoline, food, assistance health care and rents.
The larger-than-expected rise in the year-on-year consumer price index (CPI) reported Wednesday by the U.S. Department of Labor also reflected higher prices for a number of other goods and services, such as now motor vehicles, clothing and household furniture.
The CPI rose further in almost 17 years monthly.
Inflation data followed stronger-than-expected employment growth in June and suggested that the US central bank’s aggressive monetary policy stance had made little progress so far in cooling demand and reduce inflation to its 2% target.
With rents rising by a maximum of 36 years, inflation could consolidate.
Australian stocks are expected to start the day smoothly as the ASX futures fell 2 points to 6,517 at 6:50 am EAST.
At the same time, the Australian dollar remained stable at 67.57 US cents.
On Wednesday, world markets fluctuated strongly, when the euro hit 1 to 1 against the dollar for the first time in 20 years.
The U.S. Federal Reserve is expected to offer a rate hike possibly up to 100 basis points this month after a mostly severe inflation report showed that price pressures, which are already hovering around 40 years, they accelerate even more.
Eliminating volatile food and energy prices, which have been declining since the report’s survey period, the core CPI cooled to an annual rate of 5.9%.
“You would expect the CPI [report] what we saw would be a big risk-free event, but the market has shrugged, ”said Ross Mayfield, Baird’s investment strategy analyst in Louisville, Kentucky.
“[Investors] We were already expecting a very falcon Fed and I don’t think that affects much, except for the uncertainty and that has something to do with why the markets are not selling today. “
US stocks closed slightly lower overnight after investors digested U.S. inflation data warmer than expected.
While the top three U.S. equities bounced off the lows reached earlier in the day and occasionally hit positive ground throughout the session, they all turned red on the bell. closure.
The Dow Jones Industrial Average fell 0.7%, the S&P 500 lost 0.5% and the Nasdaq Composite fell 0.2%.
A group of central bankers over the past two weeks had indicated they would support what would be a second consecutive 75-point rate hike at their next policy meeting on July 26-27.
But after Wednesday’s data from the Department of Labor showed that rising gas, food and rental costs pushed the CPI up 9.1 last month from the previous year, the view may have changed.
The Bank of Canada on Wednesday raised its key interest rate by 100 basis points to try to crush inflation, surprise markets and become the first G7 country to make such an aggressive rise in this economic cycle.
Concerns about the recession had already brought down European stock markets, but the overall CPI figure was even higher than most economists had predicted.
The pan-European STOXX 600 index lost 1% and the worldwide MSCI stock indicator fell 0.3%.
In the oil markets, Brent crude rose, trading at $ 99.88 a barrel, at 07:37 EAST.
ABC / Reuters