US indices record fourth straight gain - 15.2.2018

US markets calm despite rising inflation

US stocks advanced on Wednesday despite strong January inflation report. The dollar weakness persisted: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, fell 0.8% to 88.978. The S&P 500 rallied 1.3% to 2698.63 led by financial and technology shares. The Dow Jones industrial rose 1% to 24893.49. Both Dow and SP500 recorded fourth consecutive gain. Nasdaq composite index jumped 1.9% to 7143.62. Index futures indicate higher openings today.

The rise in consumer inflation to 0.5% on month in January from 0.2% while both headline and core inflation remained steady over year were taken by markets as not a significant increase in inflation for the Federal Reserve to take aggressive steps for further monetary tightening. The risk appetite was also supported by positive earnings indicating healthy economy. In other economic news , retail sales fell by 0.3% in January, the biggest drop in almost a year, due to declines at auto dealers and home centers. And a previously reported increase in sales in December was wiped out.

European indices follow Wall Street lead

European stock indices rebounded on Wednesday as market sentiment got a boost from a bounce on Wall Street overnight. Both the euro and the British Pound added to gains against the dollar. The Stoxx Europe 600 closed 1.1% higher. Germany’s DAX 30 gained 1.2% settling at 12339.16. France’s CAC 40 rose 1.1% and UK’s FTSE 100 advanced 0.6% to 7213.97. Indices opened 0.3%-0.8% higher today.

Investors risk appetite got a boost also from positive data indicating euro-zone industrial production increased at a 0.4% rate in December, above the 0.1 % expected rate. And the second reading of euro-zone GDP in the fourth quarter came in at 0.6% from Eurostat, in line with expectations.

Asian markets rally

Asian stock indices are rising today. Nikkei ended 1.5% higher at 21464.98 despite unrelenting yen gains against the dollar. China’s markets are closed for Lunar New Year holiday, joining Taiwan. Hong Kong’s Hang Seng Index is up 1.6%. Australia’s All Ordinaries Index added 1.2% despite Australian dollar continued advance against the greenback on solid job growth.

HK50

Brent higher on smaller US crude inventories rise

Brent futures prices are gaining today on weak dollar and Saudi statement the biggest OPEC producer would be sticking with the policy to withhold production throughout 2018. Prices fell yesterday after the US Energy Information Administration report crude inventories rose less than expected - 1.8 million barrels last week, while the American Petroleum Institute had forecast 3.9 million barrels increase. April Brent crude rose 2.6% to $64.36 a barrel on Wednesday.