Reuters. FILE PHOTO: Office lights are on in banks as dawn breaks behind the financial district of Canary Wharf, in London, Britain June 24, 2016. REUTERS/Neil Hall/File Photo
A glance at your day ahead in European and global markets from Anshuman Daga
Was the recent rise in markets a dead cat bounce?
The ocean of red splashed across global markets – after Tuesday’s hotter-than-expected U.S. inflation data – shows how markets had priced in false optimism.
It’s clear given that inflation has still not peaked, despite easing commodity prices.
U.S. interest futures now show a 35% probability that the Fed will raise its benchmark rate by way of a full percentage point in a few days rather than 75 basis points.
Asian shares were hammered following a tumble on Wall Street, as the dollar steadied and two-year Treasury yields raced to a fresh 15-year high. [MKTS/GLOB]
Investors will undoubtedly be hoping that British inflation data for August, due at 0600 GMT, will produce no nasty surprise.
The best and lowest forecasts for annual consumer price inflation polled by Reuters are 10.8% and 9.6%, with the consensus estimate to arrive at 10.2%.
Markets expect the lender of England to improve interest levels by another 50 basis points in a few days, however, many economists already are revising up rate expectations because of fiscal stimulus supplied by Prime Minister Liz Truss.
In July, consumer price inflation jumped to 10.1%, making Britain the initial major rich economy to see price growth hit double digits.
Because the energy crisis unfolds in Europe, policymakers are racing to create measures to repair it.
EUROPE is defined to unveil plans on Wednesday to skim off windfall profits from energy companies and apply cuts in electricity usage over the bloc, since it seeks to shield citizens and businesses from surging energy prices.
Germany has recently said it’ll intensify lending to energy firms, dealing with surging gas prices.
As energy prices whack markets, volatility has helped global energy trader Vitol Group beat its previous records by making more profit in the initial half of this season than in the complete of this past year.
Meanwhile, as Queen Elizabeth’s coffin attained Buckingham Palace after huge crowds lined the London route, a poll showed that Britons are backing King Charles but want him to help keep his views to himself.
Reuters Poll-UK economy and monetary policy outlook https://fingfx.thomsonreuters.com/gfx/polling/klpykabnxpg/Reuters%20Poll-UK%20economy%20and%20monetary%20policy%20outlook.PNG
Key developments which could influence markets on Wednesday:
UK, Swedish and Finland inflation
Eurozone industrial production